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The growing body of HFT research: time to put old arguments to bed?
Over the last few years the great and the good of the world’s regulatory authorities that govern financial markets have studied the impacts of the electronification of the markets, and the role played by high frequency trading. We welcome the recognition in these studies that markets and end users benefit from increased use of innovative technology, in line with the experience with innovation in other industries. We provide a summary of the recent reports.
CONTINUE READINGFive years’ of providing a voice to the EU principal trading industry
This summer, FIA EPTA marked the 5th anniversary of its foundation. Although still a comparatively young organisation, this milestone has caused the people, like myself, who were there at the start to reflect upon how things have changed since we’ve been in business – as well as looking forward to what the next five years might bring.
CONTINUE READINGCRD IV bonus cap has perverse effect of increasing risk
The EU's Capital Requirements Directive CRD IV has imposed a bonus cap on credit institutions and investment firms with the intention of discouraging the excessive risk-taking with client monies that contributed to the financial crisis. However, the inappropriate application of this bonus cap to principal trading firms now has the potential to result in the perverse effect of actually increasing risk, whilst hurting market quality.
CONTINUE READINGIntellectual property and data protection issues for CFTC registrants
Financial institutions are increasingly focused on the use, protection and commercialization of confidential data. Please join Cadwalader, Wickersham & Taft partners, Vivian Maese and Steven Lofchie, as they discuss intellectual property and data protection issues affecting CFTC registrants.
CONTINUE READINGNew MiFID II resource – Due Diligence Assessment of Prospective DEA Clients
FIA's European E-Trading Committee - in cooperation with AFME, AIMA and MFA - have produced a template of questions for use by investment firms providing direct electronic access to their clients, as required under Article 22 of RTS 6.
CONTINUE READINGTag 1031 FAQ
In December 2018 the FIA and FIA Tech published Guidelines for the Simplified FIA Execution Source Code Schema.
CONTINUE READINGCFTC’s jurisdiction over fraud in the cash markets: are there any limits?
The Dodd Frank Act added a Section 6(c)(1) to the Commodity Exchange Act, entitled “Prohibition Against Manipulation.” Section 6(c)(1) authorized the CFTC to promulgate rules and regulations prohibiting any person to use or employ any manipulative or deceptive device or contrivance in connection with, among other things, a contract for sale of any commodity in interstate commerce.
CONTINUE READINGUpdated CME Group regulatory guidance on block trades
The CME Group Market Regulation Department is adopting updated guidance in its Market Regulation Advisory Notice (MRAN) concerning the execution of block trades in CME, CBOT, NYMEX, and COMEX products.
CONTINUE READINGLiquidity and Quote Fading
One observation I see made regularly by commentators on electronic markets is that liquidity can 'disappear in an instant' and is somehow ephemeral. Quotes, they say, tend to fade as soon as the market notices there's a seller around. I'm always rather bemused by this observation, because it implies that in more manual markets, liquidity is (or was) more stable.
CONTINUE READINGNon-discriminatory access to MiFID II derivatives trading venues: Critical for market transparency and competition
With the requirement for MTFs and OTFs to have objective participation criteria, MiFID II aims to dismantle existing barriers and increase competition and pre-trade transparency for all market participants. It is worth remembering, however, that despite similar objective participation criteria requirements in the US, additional guidance from regulators was required in order to address certain discriminatory practices.
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