Markit will provide members of the Asia Securities Industry and Financial Markets Association (ASIFMA) an online solution to help compliance with new electronic trading rules from Hong Kong’s Securities and Futures Commission (SFC).
The new rules take effect on 1 January 2014 and require Hong Kong-licensed brokers to attest that their electronic trading systems are properly supervised, tested and risk managed. The rules also require customers to acknowledge that they understand the algorithms and other technologies used by their brokers.
Markit will use its counterparty manager technology to provide a solution that aims to help financial institutions exchange the information required under the new rules easily and efficiently.
Using the Markit counterparty manager regulatory module, broker-dealers will upload their answers as required in the questionnaire and circulate them to their buyside counterparties. Buyside firms will be able to review the answers from each broker dealer and electronically acknowledge that they have done so.
This acknowledgement will be transmitted directly to their counterparties, allowing sellside institutions to see which customers have fulfilled their compliance requirements.
George Molina, senior vice president and director of Asian trading at Franklin Templeton Investments, said: “For several months now the Asia TraderForum buyside industry group has been seeking an efficient solution to facilitate compliance with the SFC’s new electronic trading rules. We are pleased the industry has selected a single platform to assist us in managing the process.”
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