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| The UK’s FSA maintains that the idea of price benchmarks for structured derivatives was floated to kick-start debate |
UK regulator the Financial Services Authority issued a discussion paper in May in which it outlined the possibility of introducing benchmarks in order to comply with the best execution requirements of the European Union’s Markets in Financial Instruments Directive (Mifid). But derivatives trade body the Futures and Options Association says that although benchmarking has a part to play in some areas, there is no single approach to best execution that suits all markets. Anthony Belchambers, the FOA’s chief executive, says what is described as “best” should be judged by a firm in the context of its client’s objectives as well as the type and state of the market when a transaction is completed. Belchambers says: “If UK-regulated firms are to meet the current very tight timetabling for implementing Mifid on time, it is essential that the FSA adopts a very focused and disciplined approach to transposition and allows the firms to concentrate their resources on implementing the essential and necessary requirements of the directive.