ARTICLE
15 December 2016

MFA Supports ESMA's Guidance On Trading Halts And SEC Amendments To Securities Settlement Cycle

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Cadwalader, Wickersham & Taft LLP

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The MFA endorsed the guidance prepared by the ESMA on the calibration, publication and reporting of trading halts. MFA also endorsed the benefits of the SEC's proposed amendment...
United States Corporate/Commercial Law

The MFA endorsed the guidance prepared by the European Securities and Markets Authority ("ESMA") on the calibration, publication and reporting of trading halts. MFA also endorsed the benefits of the SEC's proposed amendment to the securities transaction settlement cycle.  

In a comment letter, the MFA described ESMA's guidance as an approach to trading halts that would require trading venues to calibrate volatility parameters according to a predefined, statistically supported methodology. The MFA supported ESMA's approach generally, and emphasized that the ESMA guidelines should provide enough flexibility to "allow for market evolution and other changes in trading."

The MFA submitted a comment letter supporting the SEC's proposal to shorten the securities transaction settlement cycle to T+2. The MFA stated it believes that the proposal would decrease operational, systemic, credit, liquidity and counterparty exposure risk, and that it would benefit investors by harmonizing the U.S. securities market settlement cycle with those of non-U.S. securities markets.

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