The Financial Markets Standards Board (FMSB) has launched its final statement of good practice on trading platform disclosures, drawing extensively from existing European and UK regulatory requirements and initiatives.
FMSB has established best practices around how platform operators should disclose to their participants, addressing the fixed income, currencies and commodities markets – including platforms that are covered by existing regulation such as Mifid II, as well as those that are not, such as single dealer platforms.
The statement asks platform arrangements to include information about trading protocols, counterparty name disclosure, prioritisation, use of last look and trade dispute resolution.
In addition, the statement of good practice on electronic platforms covers possible obligations on platform participants, including systems and risk controls, as well as configuring credit and providing names of personnel authorised to access the platform.
“Ensuring that market participants have a solid understanding of how their trades are executed is a cornerstone of fair and effective markets, and with the ever-increasing electronification of markets, this Statement of Good Practice will help participants across the marketplace,” said Myles McGuinees, chief executive of FMSB.
FMSB’s paper also examined outages, including disclosure expectations related to suspension of trading, including when it is expected to resume, the status of orders or quotes when trading continues, as well as information related to the cause of trading cessation.
“The development of this Statement of Good Practice involved significant discussion between different participants which reflects the ambition of the paper to cover fixed income, currencies and commodities markets as a whole and a broad range of platforms from established MTFs (multilateral trading facilities) through to single dealer platforms,” said Zar Amrolia, co-CEO of XTX.