ACI The Financial Markets Association, has, in the form of a letter from its president, Godfried De Vidts, and chairman of the Committee for Professionalism (CFP),, Teruo Tanaka, to Pierre Francotte, CEO of Euroclear, reinforced ACI’s stance that the OTC markets function better with a minimum of regulation.
The letter was in response to an opinion article in Dialogue magazine by Francotte, which looked at the dismantling of Giovannini Barriers as Europe works towards a single clearing and settlement standard. In the article, Francotte asked, “Why have special rules for clearing and settlement and not for other financial market activities such as trading, foreign exchange and payments systems? If no such regulation is needed for such actitivites, then what is the objective rationale to do so for post-trading?”
De Vidts and Tanaka pointed out they were a little disturbed by the nature of the above comments, stating that, “Through the work of ACI’s Committee for Professionalism (CFP), we aim to keep the self-regulatory environment for inter-professional OTC financial markets intact.”
They also highlighted the content of The Model Code which covers a great deal of the areas of concern cited by Francotte, adding, “We believe banks already have enough regulation. Through the dialogue between industry groups such as ourselves and the regulators, the regulators generally agree that the OTC market could best function with a minimum of regulation. This belief forms one of the three pillars of the new capital accord.”
The letter further highlights ACI’s success in its ongoing efforts to get its exam suite officially accredited and its aim of even greater take up of its exam suite amongst the world’s regulators. It further invites Euroclear Bank to participate in the association’s ongoing work to maintain the self-regulatory environment (the company is already represented at board level in ACI Belgium). “I hope we can continue our collaboration in the various official meetings we attend, aiming to keep self regulation in place where possible for the benefit of our industry,” De Vidts concludes.