MAS outlines Best Execution proposals for finance cos, including FX brokers

Maria Nikolova

The Monetary Authority of Singapore is proposing to formalise expectations for finance companies, including Forex brokers, to have in place policies and procedures to place and/or execute customers’ orders on the best available terms.

The Monetary Authority of Singapore has earlier today published a consultation paper on new “best execution” requirements that will affect Forex brokers too. In summary, the regulator aims to formalize expectations for holders of a capital markets services licence (CMS licensees), banks, merchant banks and finance companies to have in place policies and procedures to place and/or execute customers’ orders on the best available terms. The goal is to support fair outcomes for customers. This is in line with MAS’ earlier proposal for a market operator to have in place measures to facilitate its members’ execution of customers’ orders in the customers’ interests, and to ensure that its handling and execution of bids and offers is conducted on a fair and objective basis.

The new rules will supplement existing conduct requirements on handling and execution of customers’ orders and enhance investor protection. MAS proposes to require financial institutions to have in place measures to (a) consistently deliver Best Execution when placing and/or executing customers’ orders and (b) handle comparable customers’ orders in accordance with their time of receipt.

The proposals in this consultation paper are intended to be applied to CMS licensees, banks, merchant banks and finance companies that conduct the regulated activities of dealing in securities, trading in futures contracts, leveraged foreign exchange trading, fund management and/or real estate investment trust management under the SFA.

To achieve the best available terms for customers’ orders, a company should consider different factors such as price, costs, speed, likelihood of execution and settlement, size and nature of the customer’s order, where appropriate. Various factors may have different “weight” in determining what the best available terms are. For instance, the impact to the market which in turn affects the price at which a customer’s order may be executed is more likely to be an important consideration in achieving Best Execution for a large order from an institutional customer, as compared to a retail customer’s order.

The Best Execution procedures should apply to all customers’ orders, regardless of the capacity which a Capital Markets Intermediary is acting in (whether as an agent or principal).

Also, in order to boost transparency and facilitate customers in making informed decisions on trading services, a Capital Markets Intermediary should provide adequate disclosure to customers on its Best Execution policy.

Written comments are expected by December 18, 2017 via email to [email protected]

Read this next

Retail FX

Investors from Cyprus and Dubai acquire ‘significant stake’ in M4Markets

Seychelles-regulated brokerage firm M4Markets firm has picked up some investment from Cyprus and Dubai based investors in a new funding round that it will be using to grow its business.

Executive Moves

UAE broker Amana elevates Amr Masry to sales director

Amr Masry has been promoted to a new senior role at Amana Capital, becoming the group’s newest Sales Director, following a successful tenure with the UAE-based FX and CFDs broker.

Executive Moves

TopFX promotes Omar Al-Janabi to head of sales and business development

Prime brokerage firm TopFX has strengthened its Middle East operations with the promotion of Omar Al-Janabi, who is taking on an expanded role as global head of sales and business development.

Retail FX

Plus500 says 2022 revenue to be ‘significantly’ ahead of analysts’ estimates

Israeli-based, but London-stock market listed Plus500 said it expects annual revenue and earnings to be ahead of analysts’ estimates even as trading levels normalised from record volumes in the first quarter.

Digital Assets

Crypto derivatives giant BitMEX launches spot market

Crypto exchange BitMEX is looking to branch out of its singular focus on crypto derivatives with a suite of new product offerings. Although derivatives are to remain at the heart of BitMEX’s business, the popular platform will add spot crypto trading as it aims to aggressively grow their user base.

Uncategorized

PrimeXM reports mixed trading volumes for April

PrimeXM has reported weaker trading volumes for April 2022, in line with other institutional and retail platforms that saw the activity of their clients dropped compared to a month earlier.

Digital Assets

DLT Finance approved by BaFin to support brokerage and custody of digital assets

DLT Finance is already partnered with big names within the digital asset space, including Kraken, Bitstamp, B2C2, and Bittrex.

Institutional FX

LUKB taps vestr to launch actively managed products, AMCs

The partnership with vestr goes to show the growing importance of digitising the active investment management space.

Digital Assets

Jewel taps Tokeny to launch stablecoin-as-a-service solution on Polygon

Jewel aims to offer a stablecoin-as-a-service solution to other digital asset and financial institutions B2B, allowing those businesses to provide cheaper, easier and near real time payments with stablecoins issued and redeemable directly at the bank level at Jewel.

<