Don’t let regulation put your algorithms out of business
Tighter regulation of algorithmic trading is being introduced globally often under the auspices of international bodies. In the EU, MiFID II means all trading firms using any form of trading algorithm (which includes most forms of electronic trading) need to invest in a new way of testing their algorithms or face substantial penalties and ceasing algorithmic trading.
Senior management will be held responsible for any lack of testing that results in their trading causing or contributing to market disorder.
MiFID II & MAR
MiFID II (live since 2018) imposes new obligations on investment firms governing non-live testing of algorithms on a vast range of instruments. Firms must now certify that they have tested their trading algos to avoid contributing to market disorder.
All firms that trade using algorithms are now faced with the problem of meeting these new regulatory mandated requirements, or not trading at all on European trading venues.
Additionally, MAR (Market Abuse Regulation live since 2016) also has implications on testing of algorithms.
Algorithm Stability Testing
TraderServe’s flagship product AlgoGuard is the first commercially available algorithm stability testing platform which prevents deployment of algorithms which contribute to market disorder or commit market manipulation.
AlgoGuard emulates a live, linked ecosystem of realistic markets (including RFQ brokers where required) which responds dynamically to the algorithm being tested.
You must act now if you want to ensure that your organisation is:
- Compliant with MIFID II and other global algo testing obligations, enabling continuation of trading activities on European trading venues and avoidance of massive penalties both in the EU and elsewhere.
- Protected against trading behaviours that would fall foul of MAR & other global algo market abuse regulations.