FIA recommends DMA risk management controls

A Futures Industry Association (FIA) report published yesterday aims to establish best practices in managing the risk surrounding direct access to exchanges.

In terms of execution risk tools, the report emphasised the need for exchanges to allow clearing firms to define risk controls by product. Exchanges should also provide a standard protocol to enable firms to automate the setting and updating of risk parameters for individual trading entities.

For post-trade risk controls, the report suggests exchanges should provide “drop copy” functionality to clearing and trading firms. This would give clearing firms duplicate copies of orders and executed