FMSB Issues Best Practices on Trading Platform Disclosures

The FMSB (Financial Markets Standards Board) has published its final statement of good practice on trading platform disclosures.

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The statement establishes best practices around how platform operators should disclose to their participants, covering all areas of the fixed income, currencies and commodities markets.

"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 FMSB chief Myles McGuinness.

The best practices were developed drawing extensively from existing EU and UK regulatory requirements and initiatives – covering platforms that are considered to be trading venues under existing regulations (e.g. multilateral trading facilities regulated under MiFID II) as well as those that are not (e.g. single dealer platforms).

The statement said platform arrangements should contain information about trading protocols, counterparty name disclosure, prioritisation, use of last look, and trade dispute resolution.

The statement also covers the possible obligations on platform participants, in relation to their systems and risk controls, credit configuration, and the provision of names of personnel authorised to access the platform.

The statement also examines outages, including disclosure expectations related to trading suspensions, resumption of trading, the status of orders or quotes when trading continues, and information related to the cause of trading cessation.