Risk management
IOSCO prepares to regulate pre-hedging
Vaïk Müller
— 29 November 2024
On 21 November 2024, the International Organisation of Securities Commissions (IOSCO) published a consultation on the practice ofpre-hedging. Pre-hedging vs front-running Pre-hedging must be distinguished from front-running, which is prohibited as an unfair practice. Front-running consists of a financial institution executing proprietary transactions prior to a client's transactions, to the client's detriment, with a view to exploiting future price fluctuations in the client's favour. Unlike front-running, pre-hedging enables securities firms to hedge their exposure to client orders in advance. Pre-hedging[...]