Regulations

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FX Spot

The European Markets in Financial Instruments Directive (“MiFID II”) represents a very important change in financial markets, even if its implementation applies as a continuation of MiFID I. This new directive will ensure greater investor protection, expanded asset class coverage and structural market reforms. It is applicable for firms previously exempted from MiFID I. MiFID II will dramatically change almost the entire marketplace, with far-reaching impacts on everyone engaged in the dealing and the processing of financial instruments.

Market & Financing Services Division (“MFS”) of BNP Paribas Securities Services (“BP2S”) acts in a principal capacity when transacting FX Spot with Clients, and as such:

• MFS acts on own account as a counterparty entering into arm’s length transactions and will take on one or more risks in connection with the transaction, including market and credit risk.
• By having an active hedging management, MFS maintains a low level of market risk on an intraday basis. On a general basis, when squaring itself out, MFS FX deals exclusively liquid currencies with BNPP and restricted currencies with its local sub-custodians or local approved counterparties.

In all circumstances, MFS commits to deliver fair and equitable FX Spot execution. The pricing is based on market price at the time of execution. Due to the high liquidity of the FX spot market, the market price is continuously observable on main trading platform (for example BBG) and thus execution can be assessed and benchmarked at any time.

MFS will then apply client margin over the market price. The margin is subject to strict internal guidelines and ex-post controls.

Finally, MFS is able to disclose, at any time and upon client request, all the pricing details.