DMIST, the Derivatives Market Institute for Standards, announced the publication of its standard on self-match prevention, the latest addition to the globally recognized standards framework designed to enhance market integrity, operational efficiency and regulatory compliance across the exchange-traded derivatives industry.
"This standard represents a major milestone for our industry, setting a clear path toward greater efficiency and transparency for on-exchange self-match prevention functionality," said Don Byron, executive director of DMIST. "We are confident that its adoption will empower trading participants and foster continued innovation across the marketplace."
Why Self-Match Prevention Matters
Self-matching – when buy and sell orders with common beneficial ownership are matched – can occur inadvertently and often leads to regulatory scrutiny and fines. The lack of uniformity in SMP tools across exchanges has created operational challenges for brokers and clients. The new DMIST standard addresses these issues by providing a consistent, transparent and flexible approach to SMP and:
- Reduces inadvertent wash trades and regulatory risk,
- Enables broader and more efficient use of SMP tools,
- Improves operational efficiency and supports multi-broker/API access,
- Enhances market integrity and orderly trading and
- Supports low-latency trading and regulatory compliance.
“The latest DMIST standard introduces a unified and adaptable framework for preventing self-matching, helping brokers and clients avoid compliance issues and streamline their operations, while also promoting fairness and efficiency in fast-paced trading environments,” said Staci Parrish, vice president, global industry operations and execution at DMIST.
What the Standard Delivers
The DMIST SMP standard applies to all exchanges globally, offering a roadmap for those without SMP capabilities. It also offers a benchmark for those seeking to enhance their existing offerings. Key requirements include:
- Registry and management of unique SMP identifiers,
- Flexible configuration and granularity for SMP settings,
- Transparent documentation of covered products and order types,
- No additive latency in SMP deployment and
- Clear guidance for trading participants on registration, configuration, and monitoring.
