MFA submitted a letter to the International Organization of Securities Commissions (IOSCO) concerning final good practices to maximize market integrity benefits while minimizing unintended consequences.
MFA suggests the following recommendations:
- Prioritize targeted scope by focusing enhanced tools and reporting on critical contracts and sufficiently related OTC activity, rather than broad, undifferentiated reporting across markets.
- Leverage venue proximity and expertise by ensuring trading venues generally have the closest day-to-day visibility into volumes, patterns, and trends. Venues can therefore calibrate accountability and position management tools more effectively, with regulators retaining backstop authority for exigent circumstances.
- Leverage existing reporting “pipelines” and allocate reporting obligations to the most efficient reporters (typically dealers/central nodes) to avoid requiring every end user to build duplicative systems.
- Avoid proactive, trigger-based “push” reporting, especially rules that require market
participants to automatically send sensitive OTC/overseas exposure data whenever a threshold is breached. - Promote cross-border alignment and interoperability. IOSCO should encourage common minimum data elements, consistent aggregation concepts, and practical cooperation arrangements to avoid fragmentation and duplicative builds.
- Adopt robust confidentiality, information security, data-use limitation, and segregation safeguards where exchanges receive sensitive data, to address conflicts of interest and competition concerns.
