Under FMIA, how is self-regulation defined?

Under FMIA, how is self-regulation defined?

• A. The obligation of trading venues to ensure that they have an appropriate organisational structure in respect of their operations, administration and supervision.
• B. The responsibility of traders to regulate their own bids.
• C. A formal self-regulation of exchange by government.
• D. Not defined.

Answer: (A)

Self-regulation under FMIA means that trading venues must take responsibility for organizing and supervising themselves. The venue must have an appropriate structure for its operations, administration, and oversight—essentially solid governance, risk controls, and compliance processes to run the market safely and in line with the rules. It’s about the venue’s internal governance, not about traders regulating their own bids, nor about government doing the regulation. So the statement describing the venue’s obligation to maintain an appropriate organizational structure best captures the concept.

Self-regulation under FMIA means that trading venues must take responsibility for organizing and supervising themselves. The venue must have an appropriate structure for its operations, administration, and oversight—essentially solid governance, risk controls, and compliance processes to run the market safely and in line with the rules. It’s about the venue’s internal governance, not about traders regulating their own bids, nor about government doing the regulation. So the statement describing the venue’s obligation to maintain an appropriate organizational structure best captures the concept.