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FMSB puts pre-hedging in the spotlight

The board uses case studies to help market participants navigate a tricky area attracting regulatory scrutiny.

Thomas Hyrkiel

An electric trading board.
Photo: Spencer Platt/Getty Images
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In a move intended to “advance the industry debate on pre-hedging”, the Financial Markets Stability Board (FMSB) has published a Spotlight review on the practice.

The paper cites with approval ESMA’s definition of pre-hedging as any trading activity undertaken by an investment firm:

  • where the investment firm is dealing on
    • , , , , , , ,

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