Iosco mimics industry codes to tackle pre-hedging dilemma

Advocates breathe sigh of relief, but Iosco release carries suggested restrictions

Draft recommendations proposed by international regulators to address controversy over the practice of dealers pre-hedging client orders have largely copied guidance already set out in industry codes.

That’s good news for advocates of pre-hedging who may have feared stricter guidance, but has left its critics wanting more.

“When it comes to the competitive request-for-quote scenario, we don’t feel that they’ve gone far enough with it,” says a regulatory expert at a non-bank market-maker, who