Principles for Direct Electronic Access to Markets
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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.