MFA Submits Comments on Hong Kong Consultation on Electronic Trading (with Lofchie Comment)

MFA submitted comments to the Hong Kong Securities and Futures Commission on its consultation paper on the regulation of electronic trading. In the letter, MFA supports the requirement that intermediaries implement pre- and post-trade risk controls. The primary focus of MFA's letter is as to which types of entities should be subject to which burdens. In regulating electronic trading, MFA believes that there should be an important distinction between an intermediary/vendor that provides electronic connectivity services (i.e., connectivity and routing access to liquidity centers) and end-users, such as a fund and its adviser, that use such services. According to MFA, broker-dealers should be held to a materially higher standard than advisers and funds.

Lofchie Comment: From a policy standpoint, the interesting issue raised by the letter is as to the proper allocation of responsibilities between different types of market participants.

View comment letter in full here (links externally to MFA website).