This Guide is the initiative of AIMA’s Digital Assets Working Group (the “AIMA DAWG”).1 Following the publication of the AIMA Digital Asset Custody Guide, this latest Industry Guide aims to provide industry guidance on sound practices and key considerations for institutional investors engaged, or determining whether and how to engage, in the trading of digital assets.
The Guide has been written by a cross section of practitioners, as the trading of digital assets is cross-functional in nature, ranging from technologists and cyber security professionals to legal, operations and compliance teams. It is designed for those who are seeking to expand or diversify their investments into the digital assets space, i.e., the target audience are those firms who will need the capability to hold or transact in digital assets. These firms will want to work with trading counterparties and venues who have strategic plans around servicing clients and enabling them in the digital assets economy and can use the Guide as understanding the industry sound practices.
As a general resource, the Guide should not be regarded as a substitute for professional advice, which should still be obtained where appropriate. Further, institutions engaging in digital asset custody should pay close attention to applicable regulatory requirements and guidelines issued by regulatory authorities in applicable jurisdictions. The main text of this Guide is written to be as jurisdiction neutral as possible in order for it to be of the most use to institutional investors around the world. However, the Guide does not replace or override any legal and/or regulatory requirements. Although the Guide does in some instances identify examples where specific regulators have prescribed requirements, this should not be regarded as exhaustive and institutional investors should comply with the requirements specifically applicable to their businesses in all events. Where the Guide identifies practices that are not specifically required by their particular regulators, institutional investors should consider these as a matter of sound practice to the extent they do not conflict with the requirements applicable to them.
We would like to thank the contributors to this Guide (who are listed in Appendix B), all of whom have generously volunteered their time and expertise to produce the Guide. We intend to revise the Guide further as and when material developments occur.
1 The AIMA DAWG is a cross section of senior industry experts including managers, allocators and service providers. It is tasked with driving AIMA’s regulatory engagement, thought-leadership initiatives and operational guidance in the area of digital assets. For further information, please see www.aima.org.
Contributors to the guide
|Jacob Prudhomme and Kareem Sadek||KPMG|
|John D'Agostino||Co-Chair, AIMA’s Digital Assets Working Group|
|Steven D’Mello||Albourne Partners Limited|
|Diogo Mónica||Anchorage Digital|
|Oliver Lynch||Bittrex Global|
|Konstantin Shulga||Finery Markets|
|Fedor Poskriakov||Lenz & Staehelin|
|Sarah Crabb||Simmons & Simmons|
|Thomas Barton||Trovio Group|
We would also like to thank AIMA’s Digital Assets Committee for their involvement and the following reviewers of the guide: Olga Romanova (Aaro Capital), Martin Palotai (Alphemy Capital), Nicola Harte (Archax Capital), Parker Merritt (Coin Metrics), Nicholas Dimitriou (Great South Gate Asset Management), Ilya Paveliev (Haruko) and Alexander Grieve (Tiger Hill Partners).
Table of contents
Table of contents
2. Digital Asset Trading Ecosystem
2.1 Different trading approaches
2.2 Major trading products
2.3 Core digital asset market activities
3. Trade Lifecycle Considerations
3.1 Lifecycle flow
3.2 Key considerations
4. Enterprise Risk Management
4.1 Cyber risk
4.2 Counterparty risk
4.3 Market and liquidity risk
4.4 Operational risk
4.5 Personal account dealing and personal trading policies
5. Global Regulatory Landscape
APPENDIX A: Examples of Due Diligence Questions
APPENDIX B: AIMA Working Group
APPENDIX C: About AIMA
APPENDIX D: About the Sponsor
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