This page contains a Flash digital edition of a book.
boasts of as little of 3 months from beginning to end of applying and receiving an FX license.


Confusion


In some countries there continues to be confusion as to which part of an FX operation comes under which authority – financial services or central bank. Where there are clear lines of delineation, FX brokers may still find it arduous to get licences where there is a lack of a transparent process.


“Te issue of FX derivatives and rolling spots used to be ping ponged between CySEC and the Central Bank in Cyprus for some time, as they didn’t understand why this particular financial instrument should fall under MiFID,” says Platis.


And getting to grips with the more complex instruments will become ever-important in the registration and licensing process.


“European and US regulation have similar objectives, but come at them from different angles,” observes Dick Frase, a financial services law expert at Dechert. “Te US develop detailed rules and guidance for specific situations, which add together to form an overall picture. Te European approach is to start with a high level plan and work down from there into the detail. But regulation everywhere is becoming more detailed and prescriptive”


Getting to grips with stricter regulatory requirements is an increasingly global issue. “US regulation is increasingly extra- territorial, and the European Union is going the same way,” says Frase.


Te tightening of rules on the huge over-the-counter (OTC) derivatives market falls under


MiFID, as they do with Dodd- Franks. As nearly every foreign exchange operation uses and trades rolling contracts, futures and options, they need to fulfil capital adequacy ratios under EU laws based on value expenditure, market, operational and counter- party risk and whether they are dealing as a principle.


EMIR Felix Shipkevich


“There’s been a lot of activity in New Zealand


and Australia with US firms looking at registration primarily because the capitalisation requirements are significantly less,”


16 | INSTITUTIONAL FX SERVICES - THE BROKERS HANDBOOK 2012/2013


“FX brokers will also have to consider the upcoming European Markets Infrastructure Regulation which mandates the clearing of many OTC derivatives. Tis could have wide ranging consequences, in the form of increased collateral requirements, the concentration of risk in a small number of clearing counterparties, and new capital requirements,” warns Dick Frase.


How these even more complex regulations will influence the industry in Europe is yet to be seen. One of the concerns is the increased costs these new rules may bring – increased levels of monitoring require technology modernisation to comply,


Regulation & Compliance


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124