The Association for Financial Markets in Europe (AFME) has published a new due diligence questionnaire with a view to standardising and simplifying the process of completing such questionnaires for sub-custodians.
The due diligence questionnaire has been created through a collaboration between the AFME and major European equities exchanges. The questionnaire is to be sent bilaterally from investment firms to their exchange counterparts. The questionnaire includes questions related to:
- communication and collaboration;
- treatment of confidential information;
- due diligence;
- regulatory data and data management;
- algorithms and algorithmic testing;
- direct electronic access impacts;
- order to trade ratio / market making; and
- high frequency trading.
The AFME will review the due diligence questionnaire in Q3 2017 to reflect any regulatory changes or major themes which develop over the coming year.