Client consent to execution policy and execution of orders outside a regulated market or MTF - COBS Provision: Difference between revisions

Client consent to execution policy and execution of orders outside a regulated market or MTF - COBS Provision (view source)

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 There is an unspoken distrinction in the {{tag|COBS}} rules between:
 *“'''agency'''” or “'''quasi-agency'''” orders: orders whereby a  broker receives instructions from client and then turns around and interacts with third party venues (including {{fcaprov|regulated market}}s, {{fcaprov|MTF}}s but also unregulated venues like systematic internalisers), without involvement of the client, to fill that order); and
-*“'''bilateral'''” transactions where client trades with the broker directly in a principal capacity and any transaction between the broker and the market is by way of {{tag|hedge}} and not fulfillment of the customer’s order. These are things like OTC derivatives under an {{isdama}}; spot FX trades and so on.
+*“'''bilateral'''” transactions where client trades with the broker directly in a principal capacity and any transaction between the broker and the market is by way of {{tag|hedge}} and not fulfillment of the customer’s order. These are things like OTC derivatives under an {{isdama}}; spot FX trades and so on. The point is if you ask for an OTC transaction then, by definition, you are consenting for it to not be executed on exchange. In the same way that ordering a cheeseburger is, by definition, consenting to being given non-vegan food.