Antonella Sciarrone Alibrandi, Edoardo GrossuleFrom: Regulation of the EU Financial Markets: MiFID II and MiFIR
Edited By: Danny Busch, Guido Ferrarini
This chapter considers the MiFID II/MiFIR regulation of the commodity derivatives sector, one of the areas most affected by the financial markets reform process, particularly the MiFID I review. It analyses the position limits regime, and the new rules amplifying the regulatory and supervisory powers of ESMA, of national competent authorities (NCAs) and trading venues, which introducing a range of interventionist tools that can affect operators’ investment business. The chapter also stresses the need to introduce a specific regulation depending on different commodity derivatives. The main provisions and the specific technical standards are analysed, paying particular attention to controversial measures such as the definition of the ancillary activities, the methodology to calculate the position limits, and the authorities’ new powers.
Antonella Sciarrone Alibrandi, Claudio FrigeniFrom: Governance of Financial Institutions
Edited By: Danny Busch, Guido Ferrarini, Gerard van Solinge
This chapter examines the concepts of conduct risk and misconduct risk. Despite the attention paid to this subject by regulators, commentators, and others, there is some confusion about what conduct risk specifically is. Conduct risk is generally viewed as the risk associated with illegal or unethical conduct engaged in by financial firms and their employees. Beyond this broad definition, different institutions have focused their attention on specific areas or activities in which misconduct may occur and attempted to understand the drivers of conduct risk in these areas or activities. Taking into account that the main objective should be the prevention — rather than punishment — of misconduct, the international debate on conduct risk has begun stressing the importance of fostering robust firm cultures, in which customer satisfaction and ethical behaviour would become widespread among financial firms and their employees.