2.12.1. Conflicts of interest – core obligation

A Digital Asset Trading Facility Operator must take reasonable steps, including the maintenance of adequate systems and controls, governance and internal policies and procedures, to ensure that the performance of its regulatory functions and obligations is not adversely affected by its commercial interests.

Guidance: regulatory functions of a Digital Asset Trading Facility Operator

The regulatory functions of a Digital Asset Trading Facility Operator include, as appropriate:

• its obligations to monitor and enforce compliance with its Business Rules, Admission to Trading Rules, and Membership Rules;

• its obligation to prevent, detect and report Market Abuse or Financial Crime, as well as to comply with applicable laws and regulations generally; and

• its obligations in respect of admission of Digital Assets to trading or to clearing.

2.12.2. Conflicts of interest – identification and management

For the purposes of compliance with DAA 2.12.1, a Digital Asset Trading Facility Operator must:

(a)  identify conflicts between the interests of the Digital Asset Trading Facility Operator, its shareholders, owners and operators and the interests of the Persons who make use of its facilities operated by it; and

(b)  manage and disclose such conflicts so as to avoid adverse consequences for the sound functioning and operation of the facilities operated by the Digital Asset Trading Facility Operator and for the Persons who make use of its them.

2.12.3. Personal account transactions

A Digital Asset Trading Facility Operator must establish and maintain adequate policies and procedures to ensure that its Employees do not undertake personal account transactions in Digital Assets in a manner that creates or has the potential to create conflicts of interest or otherwise create a risk of Market Abuse or Financial Crime.

2.12.4. Conflicts of interest – code of conduct

A Digital Asset Trading Facility Operator must establish a code of conduct that sets out the expected standards of behaviour for its Employees, including clear procedures for addressing (potential) conflicts of interest. Such a code must be binding on all of its Employees.