IOSCO publishes principles for direct electronic access to markets
16 August 2010
The report contains principles designed to guide intermediaries, markets and regulators in relation to the areas of pre-conditions for direct electronic access (DEA), information flow and adequate systems and controls.
The Technical Committee of the International Organization of Securities Commissions (IOSCO) has published a Final Report – Principles for Direct Electronic Access to Markets (DEA Principles) – containing principles designed to guide intermediaries, markets and regulators in relation to the areas of pre-conditions for direct electronic access (DEA), information flow and adequate systems and controls.
The Final Report is based on analyses of market and regulatory developments and of the responses received to the original Consultation Report – Policies on Direct Electronic Access – which identified and discussed the benefits, potential risks and concerns associated with DEA.
The DEA Principles set out in the report are based on the recognition that markets, intermediaries and regulators must each play a role in addressing the potential risks posed by DEA. In addition regulators should retain the power to allow or prohibit any form of DEA as well as to establish requirements in the DEA area, including pre-trade controls and risk limits and should also exercise regulatory oversight over the decisions made by clients, intermediaries and exchanges.
The principles cover the following areas:
· Minimum Customer Standards
· Legally Binding Agreement
· Intermediary’s Responsibility for Trades
· Customer Identification
· Pre and Post-Trade Transparency
· Markets
· Intermediaries
· Adequacy of Systems
© IOSCO
