![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
FOA updates end-user derivatives guidelines
UK trade body the Futures and Options Association (FOA) yesterday launched updated guidelines for derivatives end-users, which take into account electronic trading and the past year’s big US corporate failures.
“Competence in risk management alongside proper corporate governance are today investment criteria that should be satisfied before a portfolio manager will invest in a business,” said Roy Leighton, chairman of the FOA, adding that the new guidelines will help companies implement the necessary checks and balances.
The updated guidelines, which were published in association with PricewaterhouseCoopers and the Clifford Chance law firm, comprise six ‘core principles’ for managing derivatives risk. Four of these focus on the identification and management of market risk, credit risk, operational risk and legal risk. The other two focus on how senior management should set up and organise effective internal oversight of derivatives.
Gay Huey Evans, director of markets and exchanges at the UK Financial Services Authority (FSA), said the guidelines will make a timely and topical contribution to the supervision and management of derivatives risk. “Derivatives play a key role in managing risk, but also generate their own risk,” said Evans. “The responsibility for managing risk lies not with the regulators but with the organisations themselves.”
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
The standoff over separate account margining
CFTC issues sixth extension of no-action relief as long-awaited final rule stalls
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
EU banks lose relief on model test after FRTB delay
Deferment of new trading book regime to January 2025 eats into transition period for “erratic” P&L attribution test
Sunday night football and the Basel III endgame
Big banks, political advocates and housing organisations are unlikely allies in race to dropkick new capital regime
Futures exchanges seek clarity on China licensing regime
Hazy details on landmark Futures and Derivatives Law breeds legal uncertainty, unnerving operators
Some EU banks wanted option to start FRTB on time
Representatives of member states raised possibility with European Commission at July meeting discussing the delay
For US Treasury troubles, treat the cause not the symptom
Regulatory alarm about hidden risk in the Treasury futures market misses the point, fund association execs write
Iosco delays pre-hedging consultation to November
Review into controversial practice splits industry