Principles for Direct Electronic Access to Markets
IOSCO sets forth principles to guide markets, intermediaries and regulators. The principles are premised on the recognition that markets, intermediaries, and regulators each must play a role in addressing the risks of direct electronic access (DEA). IOSCO sets forth elements regarding principles pertinent to DEA, including those that address pre-conditions for DEA, information flow, and adequate systems and controls. A key aspect of the principles provide that neither the market nor an intermediary should offer DEA unless adequate pre-trade information is provided, and both regulatory and financial controls, including automated pre-trade controls, are in place to enable intermediaries to implement appropriate risk limits.