THOMSON REUTERS DEALING | 8 Date of issue: 1 December 2016 Document Version 1.0 Chapter 4 Client...

THOMSON REUTERS

DEALING

Page | 1 Date of issue: 1 December 2016 Document Version 1.0

OPERATIONAL PROCEDURES


© Thomson Reuters 2016. All Rights Reserved.

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Contents

About this document........................................................................................................... 4

Chapter 1 General Provisions ........................................................................................ 5

Chapter 2 Amendments to Operational Procedures .................................................... 6

Chapter 3 Access and Accountability ............................................................................ 7

Chapter 4 Client Classification & Eligibility Criteria ..................................................... 8

Chapter 5 Compliance with the Regulatory Environment ............................................ 9

Chapter 6 Market Conduct .............................................................................................11

Chapter 7 Execution, Clearing & Settlement ................................................................13

Chapter 8 Agency Transactions ....................................................................................14

Chapter 9 Disputes .........................................................................................................15

Chapter 10 Rule Breach Complaints, Investigations & Disciplinary Sanctions .......16

Chapter 11 Records Management ...............................................................................18

Chapter 12 FX Trading Roaming ..................................................................................19

Chapter 13 Definitions ..................................................................................................20

About this document


About this document

Intended readership

This document is applicable to Thomson Reuters Dealing Clients. Clients are required to be familiar with the contents of these Operational Procedures and ensure that their Users comply with them at all times. The Operational Procedures aim to promote the highest standards of integrity, professionalism and ethical behaviour when using Thomson Reuters Dealing.

Capitalised terms used in this document are defined in the Definitions section.

.


Chapter 1 General Provisions

1.1 Clients must comply at all times with the letter and spirit of these Operational

Procedures in addition to any other regulatory obligations applicable to Clients, when

conducting investment and/or non-investment instrument activity. The Operational

Procedures are transparent, objective and non-discretionary, defining the highest

standards of integrity, professionalism and ethical behaviour, promoting efficient, fair

and orderly market environments.

1.2 Clients agree to comply with any relevant supplementary operational procedures, rule

books, technical specifications, manuals, directions or other guidance issued by

Thomson Reuters from time to time in respect to Dealing (“Supplementary

Procedures”). This includes the Dealing Coordinator Guide referenced in Chapter 3.

1.3 Thomson Reuters is not a party to, and will not have any liability, or maintain any

trading accounts with respect to Transactions initiated on Dealing. Execution, payment

and settlement of Transactions is the sole responsibility of the two Counterparties

concerned and occurs outside of the Dealing platform (see Chapter 7).

1.4 Thomson Reuters is not responsible for and shall not be liable for the default of any

Client on any Transaction.

1.5 Clients are responsible for fulfilling their own (if any) Transaction reporting and EMIR

reporting requirements (or any other applicable regulatory reporting requirements) in

respect of any Transactions conducted on Dealing. .

1.6 Relevant swap products subject to Dodd-Frank regulation must be executed on a

Swap Execution Facility (SEF). Clients of the Thomson Reuters Swap Execution

Facility are bound by the Thomson Reuters SEF Rule Book. Dealing is not a registered

SEF.

1.7 In the event of any conflict between the Supplementary Procedures and these

Operational Procedures the Supplementary Procedures shall take precedence.

1.8 All provisions of these Operational Procedures shall be construed in accordance with

the laws of England and Wales. In the event of any inconsistency between the English

version of these Operational Procedures and a translated version, the English version

shall be considered to be the binding version.


Chapter 2 Amendments to Operational Procedures

2.1 Thomson Reuters may amend or add to these Operational Procedures at any time,

providing Clients with thirty (30) days’ prior notice. Clients will be notified via the

Thomson Reuters Dealing Xtra website: https://dxtra.markets.reuters.com

2.2 Thomson Reuters reserves the right to make a change to these Operational

Procedures at any time, without prior notice, where such change is required by law of

regulation (or, in Thomson Reuters view, acting reasonably at all times, that such

change is required or expected by a Competent Authority). However, any changes of

this nature shall still be notified to Clients after the change is made.

2.3 Thomson Reuters may make non-material changes to these Operational Procedures at

any time without notice.

https://dxtra.markets.reuters.com/


Chapter 3 Access and Accountability

3.1 Clients must ensure that their Users are adequately trained, supervised and competent

and that they comply with these Operational Procedures, relevant laws, regulations

and codes of conduct in relation to the markets in which their Users operate.

3.2 Clients are responsible for the actions of their Users, including ensuring that Users

hold all necessary regulatory permissions and authority to commit to Transactions.

3.3 Clients must authorise and appoint two Dealing Coordinators per Dealing “code” who

shall be responsible for day-to-day operational management of Client’s use of Dealing

under each Dealing code. The Dealing Coordinator will act as the main contact with

Thomson Reuters for co-ordinating support issues. Full details of the Dealing

Coordinator’s responsibilities are contained in the Dealing Coordinator User Guide

which can be accessed via Thomson Reuters Dealing Xtra website:

https://dxtra.markets.reuters.com, under the “Documentation” section.

3.4 Clients must provide Thomson Reuters with an up-to-date global list of contact details,

enabling appropriate resolution of any service issues impacting Dealing.

3.5 Clients must ensure that their Users never operate Dealing under the profile identifier

of another User, only access Dealing using their own User ID and password, never

disclosing login information to another person, and lock, log off or shut down

unattended platforms.

3.6 Client acknowledges that Dealing conversations conducted between Counterparties on

FX Trading will result in the individual trader’s email address (for both Counterparties)

being disclosed on Dealing tickets and any printer outputs of such conversations from

FX Trading. This is due to each User’s login ID to FX Trading comprising of their e-mail

address. Clients will at all times process any Personally Identifiable Information (PII)

received from FX Trading in accordance with applicable laws or regulations

governing the processing of PII. Such PII may only be used in respect to the

negotiation, execution, clearing and settlement of the Transaction with the relevant

Counterparty. By using FX Trading, Users consent to such disclosure and use of their

e-mail address as set out in this clause.

https://dxtra.markets.reuters.com/


Chapter 4 Client Classification & Eligibility Criteria

4.1 Subject to section 4.2 below, Thomson Reuters only accepts clients which meet the

criteria of Eligible Counterparties (either per se or elective) as defined in the Financial

Conduct Authority (FCA) Conduct of Business Sourcebook (COBS 3.6).

4.2 Clients using Dealing in the United States or otherwise conducting Transactions

subject to United States laws and/or regulations, agree that they are classified as an

Eligible Contract Participant (ECP) as defined in the Commodity Exchange Act (CEA)

and that, if the Client is trading on behalf of other persons or customers, such persons

or customers are classified as ECPs.

4.3 Clients must be fit and proper, acting with honesty, integrity, skill and due diligence,

and hold sufficient competence, capability, resources, financial soundness,

management and control when conducting activities on Dealing.


Chapter 5 Compliance with the Regulatory Environment

5.1 Clients must comply with any domestic currency restrictions. Countries identified with

currency restrictions include, but are not limited to Brazil, China, India, Indonesia,

Malaysia, Philippines, South Korea, Taiwan and Thailand.

5.2 Clients must comply with these Operational Procedures in addition to all applicable

laws, regulations, codes of conduct and market practice to which Clients are bound.

This includes any applicable laws and regulations relating to money laundering,

proceeds of crime and any other financial crime legislation in force in any jurisdictions.

5.3 Where Thomson Reuters is of the view that, by continuing to provide Dealing to a

Client, it would be at risk of becoming involved in an arrangement which it knows or

suspects facilitates the acquisition, retention, use or control of criminal property by or

on behalf of another person, it may terminate access to Dealing, either temporarily or

permanently, without prior notice and with immediate effect.

5.4 In addition, Clients must refrain from using Dealing in connection with any activity that

is covered under economic sanctions or trade controls restrictions imposed by the

United States and the European Union at any time, which may mean Clients are

unable to use Dealing or that their use is limited. Failure to comply with this clause

may result in termination from Dealing without prior notice and with immediate effect.

5.5 Dealing Clients who are U.S. Persons may use Dealing for negotiation of Swap

Transactions, however any execution of Swap Transactions must occur on a SEF or

through bilateral discussions outside of Dealing, as applicable. Any relevant Swap

Transaction subject to Dodd-Frank regulation purportedly agreed by U.S. Persons on

or through Dealing is not legally binding and shall be null and void.

5.6 The following table provides examples of codes of conduct and market practice. As

these are subject to change from time to time, Thomson Reuters does not warrant or

represent as to their validity or applicability:

Codes of Conduct & Market Practice

Organisation Title Link

Financial Markets Association (ACI)

ACI - The Model Code (The International Code of Conduct and Practice for the Financial Markets)

http://www.aciforex.org/

London Foreign Exchange Joint Standing Committee (FXJSC)

The Non-Investment Products (NIPS) Code

http://www.bankofengland.co.uk/markets/Pages/forex/fxjsc/default.aspx

Hong Kong Treasury Markets Association

Code of Conduct and Practice http://www.tma.org.hk/PubFile/tmacode.pdf

New York Foreign Exchange Committee

Guidelines for Foreign Exchange Trading Activities

http://www.ny.frb.org/FXC/2010/tradingguidelinesNov2010.pdf

http://www.aciforex.org/




http://www.tma.org.hk/PubFile/tmacode.pdf

http://www.tma.org.hk/PubFile/tmacode.pdf




Codes of Conduct & Market Practice

Organisation Title Link

Singapore Foreign Exchange Market Committee

The Singapore Guide to Conduct and Market Practices for Treasury Activities (Blue Book)

http://www.sfemc.org/pdf/SingaporeBlueBook_April2012.pdf

Tokyo Foreign Exchange Committee

Tokyo Code of Conduct (Orange Book) http://www.fxcomtky.com/coc/code_of_conduct_e.pdf

European Securities and Markets Authority (ESMA)

Guidelines - Systems and controls in automated trading environments

http://www.esma.europa.eu/system/files/esma_2012_122_en.pdf

National Futures Association (NFA)

Rules Governing the Business Conduct of Members Registered with the Commission

http://www.nfa.futures.org/nfamanual/NFAManualTOC.aspx?Section=4

Bank Negara Malaysia (BNM)

The Malaysian Code of Conduct for Principals and Brokers in the Wholesale Money and Foreign Exchange Markets

http://www.bnm.gov.my/



http://www.fxcomtky.com/coc/code_of_conduct_e.pdf

http://www.fxcomtky.com/coc/code_of_conduct_e.pdf






http://www.bnm.gov.my/


Chapter 6 Market Conduct

6.1 Clients must ensure that all Orders are made with a clear, genuine intent to trade.

Prices that are not intended to be tradable must be clearly marked as indicative.

6.2 Clients must not use Dealing to send messages that are fraudulent, harassing,

libellous, slanderous, obscene, or a violation of any rights of publicity or privacy, that

facilitate criminal transactions or contravene any applicable law.

6.3 Clients are responsible for monitoring their activity on Dealing to identify breaches of

compliance with these Operational Procedures, including identifying suspicions of

disorderly trading conditions or conduct that may involve market abuse, and for

reporting any breaches or concerns identified directly to

[email protected]

6.4 Thomson Reuters will make every effort to monitor activity on Dealing to identify

breaches of compliance with these Operational Procedures, including identifying

suspicions of disorderly trading conditions or abusive conduct (as defined in 6.7 below).

Thomson Reuters will comply with its regulatory obligations to report suspicious activity

to the relevant regulator, competent authority or law enforcement agency.

6.5 Clients using algorithms to access Dealing must monitor automatically the algorithms

to ensure compliance with these Operational Procedures, preventing disorderly trading

conditions and abusive market behaviour, and must report system malfunctions or

breaches to [email protected].

6.6 Clients offering proprietary or third party algorithms or benchmark orders to their

counterparties through Dealing represent and warrant to Thomson Reuters that they

have all necessary rights and authority to provide such algorithms and benchmarks.

6.7 The following types of behaviour (collectively described as “abusive conduct”), whether

intentional or accidental, manual or automated, and whether individually or in collusion

with others, are prohibited on Dealing:

6.7.1 Committing any act or course of conduct which creates, or is likely to create, a false or misleading impression of the market in, or the price, supply, or value of, any instrument traded on that platform, or any instrument, benchmark or reference, whose value depends on that instrument;

6.7.2 Creating Money Market strategies (whether automated or manual) designed to intercept other Users’ trading strategies or provoke order entry responses from other participants, where there is no intention of, or real economic rationale, for trading at the rates specified in the orders;

6.7.3 Submitting fictitious orders, i.e. orders with a fictitious quantity or price, or entering into, or attempting to enter into, artificial transactions;

6.7.4 Committing any act which is likely to damage the fairness or integrity of the Transactional Services markets, platforms or environments;

6.7.5 Committing any act or engaging in any course of conduct which causes, or contributes to, a breach of these rules by another Client;

mailto:[email protected]


6.7.6 Effecting a pre-arranged transaction that is designed to give the market a false view of supply, demand or pricing of an instrument;

6.7.7 Committing any act of deception, fraud or contrivance in relation to Dealing, or to any markets, benchmarks or references, whose value depends on instruments admitted to the platforms and markets operated by Thomson Reuters.

6.7.8 Any activity whatsoever that could be interpreted by a competent authority or law enforcement agency as a breach of abusive conduct regulations or laws.

6.7.9 It is also prohibited to encourage another party to conduct these types of behaviour.


Chapter 7 Execution, Clearing & Settlement

7.1 Clients may use Dealing to communicate, negotiate and agree commercial terms in

respect of Transactions however execution, clearing and settlement of

Transactions occurs outside of Dealing in the back office of the respective

Counterparties.

7.2 Clients are responsible for ensuring the prompt exchange and processing of

Transaction confirmations directly with their Counterparties in accordance with

market practice.

7.3 Clients are responsible for the post-trade clearing and settlement of all executed

Orders bi-laterally, except where the Client is acting as an agent (see Chapter 8).


Chapter 8 Agency Transactions

8.1 Clients acting in the capacity as agent (i.e. conducting Transactions on behalf of any

person other than itself, referred to herein as a “principal”), must be appropriately

authorised to act as such principal’s agent in conducting Transactions on Dealing. For

example, these Clients include Inter-Dealer Brokers.

8.2 The Client is solely responsible for all aspects of the Client’s relationship with its

principals and compliance with all applicable regulations and codes of conduct (e.g.

FCA Approved Persons’ Regime and Principles for Business), including the Financial

Markets Association (ACI) Model Code, the London Foreign Exchange Joint Standing

Committee (FXJSC) and the Non-Investment Products (NIPS) Code.

8.3 Transactions conducted on an agency basis create legal, valid, binding and

enforceable obligations of the relevant principal enforceable by the Client and the

applicable counterparty in accordance with their terms.

8.4 The Client must: i) assess the suitability of each Order it submits on behalf of a

principal; (ii) provide support to its principals, including addressing all inquiries from a

principal regarding Transactions; and (iii) provide its principals with all required

disclosures in connection with any Transaction.

8.5 Section 7.3 of Chapter 7 is not applicable to Clients trading on an agency basis.

Payment and settlement of a Transaction executed by a Client acting in the capacity as

agent is the sole responsibility of the relevant counterparty (on whose behalf the Client

conducts the Transaction).


Chapter 9 Disputes

9.1 Clients must act with integrity and mutual respect to promptly resolve disputes directly

with their counterparty, including agreeing Transaction cancellation and amendments.


Chapter 10 Rule Breach Complaints, Investigations & Disciplinary Sanctions

10.1 Clients are responsible for monitoring their use of Dealing to identify breaches of these

Operational Procedures, including identifying suspicious or disorderly trading

conditions or conduct that may involve market abuse. Any breaches or concerns

identified should be reported to [email protected]. Clients shall

provide all information in a timely manner to enable the matter to be investigated. This

is in addition to any obligations Clients have to make a Suspicious Transaction Report

(“STR”) to relevant Competent Authorities where they reasonably suspect that a

Transaction might constitute insider dealing or market manipulation.

10.2 Clients must cooperate with Thomson Reuters and any regulatory investigation,

including facilitating the monitoring of compliance with conduct rules, in an open and

honest manner. and providing either soft or hard copies of data or records upon

request promptly.

10.3 Thomson Reuters has a regulatory obligation to report significant breaches of these

Operational Procedures, disorderly trading conditions and market abuse suspicions to

the Financial Conduct Authority (FCA).

10.4 Thomson Reuters will assist any Competent Authority, in any investigation of

fraudulent or abusive conduct as requested. In this respect, we may disclose any

information, data or documents received from any Client in connection with its use of

Dealing to any Competent Authority, where these are required in connection with an

investigation, inquiry or proceedings by such authority.

10.5 In the interests of maintaining a fair and orderly market, Thomson Reuters will impose

any of the following sanctions in respect of breaches of these Operational Procedures

at its discretion:

Verbal Warning

Written Warning

Temporary Suspension

Termination of Membership.

10.6 Where appropriate, instances of breaches of these Operational Procedures may be

referred to the F&R Disciplinary Committee for consideration.

10.7 Thomson Reuters may publish, with or without disclosing the identity of the Client

concerned, in part, in summary, or in full, findings of the F&R Disciplinary Committee or

Appeals Panel, where it believes that to do so would be of assistance to the market.

10.8 All appeals against the findings of the F&R Disciplinary Committee must be addressed

in writing within five business days of notification of the penalty to the General Counsel,

Europe, F&R Legal Department of Thomson Reuters at the following address:

General Counsel, Europe, F&R Legal Department, Thomson Reuters, 30 South Colonnade, Canary Wharf, London E14 5EP

mailto:[email protected]


The name of the firm, the decision appealed against and the date of the decision must be clearly stated.


Chapter 11 Records Management

11.1 Thomson Reuters requires Clients to maintain records of their trading activity on

Dealing for a minimum of five years. ,

11.2 In addition to clause 12.1, Clients must maintain records of their trading activity that

comply with their legal and regulatory record keeping obligations. Dealing is not a

trade repository or archiving substitute for Client’s own books and records obligations.


Chapter 12 FX Trading Roaming

12.1 The following terms apply to any User accessing FX Trading outside their primary

location (such locations knows as “Roaming Locations”). A User’s “primary location” is

the location in which the User is contracted and billed from, as set out on the Client FX

Trading Order Form.

12.2 Clients’ use of FX Trading in Roaming Locations is permitted on an ad hoc and

infrequent basis only. If a User changes its primary location to another country, Clients

shall notify Thomson Reuters as soon as practicable and the continued use of FX

Trading from that new primary location may be subject to that Client entering into an

appropriate local Order Form (provided that FX Trading is available for sale in that

location).

12.3 Clients shall ensure they have obtained and maintain any applicable registrations,

authorisations and/or licenses or meets any other applicable legal or regulatory

requirements in any Roaming Location in which its Users undertake trading activity on

FX Trading.

12.4 Each Client acknowledges that any tax liabilities in respect of that Client’s decision to

allow its Users access and/or use of FX Trading from the Roaming Locations shall be

the responsibility of that Client.

12.5 Thomson Reuters may withdraw or restrict rights to use FX Trading in Roaming

Locations if reasonably required to ensure the stability of FX Trading for

technical/security reasons or if required by the applicable law or regulation.

12.6 Clients continue to be responsible for ensuring each User is aware of and complies

with the obligations in these Operational Procedures and any Supplementary

Procedures irrespective of whether they are accessing FX Trading in a Roaming

Location or otherwise.


Chapter 13 Definitions

Capitalised terms used in this document are defined as follows:

Table of Definitions

Term Definition

ACI The Financial Markets Association

Administrator A person nominated by Client to authorize certain Users to access the applicable Transactional Service

Client(s) the Client entity that has subscribed to Dealing as identified on the Order Form

Client Agreement The agreement entered into between a Client and RTSL pursuant to which RTSL provides that Client with access to Dealing

Competent Authority Any person or organization that has the legally delegated or invested authority, capacity, or power to perform a designated function, such as a financial services regulator

Counterparty The opposite party in a bilateral agreement, contract, or transaction

Dealing Thomson Reuters Dealing, including any successor product, if applicable (accessed via FX Trading or legacy Dealing keystation)

Dealing Coordinator a person nominated by a Client to be responsible for day-to-day operational management of Client’s trading activity on Dealing at specific Client locations, and who acts as the main contact with Thomson Reuters for co-ordinating support issues

EMIR European Markets Infrastructure Regulation

FCA Financial Conduct Authority

FXJSC London Foreign Exchange Joint Standing Committee

FX Trading Thomson Reuters FX Trading, including any successor product, if applicable. FX Trading provides access to various Thomson Reuters FX platforms (including Dealing). For the purposes of these Operational Procedures, references to FX Trading in Chapter 3 and Chapter 12 mean Dealing as accessed via FX Trading.

Inter-Dealer Broker (IDB) Inter-Dealer Broker means any Client acting as in an agency capacity as an intermediary or arranger of Transactions using Dealing

NIPS Code FXJSC Non-Investment Products (NIPS) Code

Operational Procedures these Operational Procedures

Order(s) An expression of willingness to buy or sell a specified quantity of a specified currency (or security) at a specified or better price


Table of Definitions

Order Form The Thomson Reuters form signed by Client under which Client subscribes to Dealing

Personally Identifiable Information (PII)

Any information that, alone or in combination with other information, can be used to identify, locate or contact an individual, including information constituting “personal data” as defined in the European Union Data Protection Directive (94/46/EC).

SEF Swap Execution Facility

Suspicious Transaction

Report (STR)

Reports to competent authorities required under Article 6(9) of MAD where a person professionally arranging transactions reasonably suspects that a transaction might constitute insider dealing or market manipulation

Swap a swap, as defined in Section 1a(47) of the Commodity Exchange Act, and the Commodity Futures Trading Commission.’s rules and regulations promulgated thereunder.

Transaction(s) A Transaction in respect of any financial instrument

Thomson Reuters The Thomson Reuters Group of companies (including Reuters Transaction Services Limited)

U.S. Persons Has the meaning prescribed in interpretative guidance issued by the US Commodity Futures Trading Commission (CFTC) from time to time

User(s) A person authorised by a Client to use Dealing on behalf of that Client.

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