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Regulators concerned about MiFID II risk management 

June 15, 2015

Madhvi Mavadiva, Treasury Insider

As highlighted by speakers at the FIA International Derivatives Expo in London last week, there are concerns surrounding the management of risk when the new MiFID II legislation takes effect from January 2017.

First applied in the UK in 2007, the Markets in Financial Instruments Directive (MiFID) is a framework of legislation for investment intermediaries and the organised trading of financial instruments. It is now being revised in order to further protect investors and improve how financial markets operate post-financial crisis, according to the Financial Conduct Authority.

Some European regulators are concerned about MiFID’s access to the central counterparty (CCP) as handling data and managing risk could prove to be difficult under these conditions.

The CCP is a clearing organisation that works in between the two parties in a transaction, becoming the seller to the buyer and the buyer to the seller. After this, the CCP will use risk management techniques to protect members from any losses.

Read more: TreasuryInsider

 
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