✔ Title Transfer Collateral Arrangements (TTCAs) are
not to be made with retail clients.
✔ Firms need to assess the appropriateness of the
use of TTCAs and document the assessment
process. They then need to show why its use is
✔ Clients need to be explicitly advised of the risks of
TTCA on assets.
✔ Clients need to give explicit consent to enter into a
TTCA and indicate that they understand the
✔ Fund firms have responsibility to ensure borrowers
of client assets supply sufficient collateral and that
they monitor the appropriateness of the collateral
✔ Fund firms have an obligation to regularly review
third party accounts being used on behalf of clients.
✔ Client funds should be placed with more than one
firm to safeguard clients’ rights and minimise risk
✔ National regulators can request formal explanations
as to why client funds are inadequately diversified.
✔ A limit has been set on the percentage of client
funds that can be deposited with an intra-group
credit institution. National authorities are
encouraged to probe reasons for any lack of
✔ Risk disclosures need to be drawn up for clients to
make them aware of any potential issues relating
to where assets are held.
✔ Firms sending two messages a second, trading one
instrument on European markets will be considered
high frequency traders from 2018.
✔ Alternatively, firms sending four messages per
second across all instruments will also be
considered high frequency traders.
✔ HFT firms must store trading algorithm details for
five years (minimum).
✔ HFT firms that are a member of an exchange must
be authorised by the national regulator.
✔ The price of market data needs to be
commensurate with the cost of producing and
disseminating it – plus a ‘reasonable’ margin.
✔ These production costs need to include any
“appropriate share” of joint costs for other services
provided by APAs and CTPs.
✔ Data providers will have to disclose price lists and
percentage of revenue earned from data sets.