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Algorithmic trading, anti abuse measures and an interesting view on insider trading

The focus on algorithmic trading with regards to anti abuse measures continues. Last week, Nasdaq published this article entitled “Best Practices in Algorithmic Trading Compliance”. It summarises the measures outlined in the FCA’s recent paper on the topic (see here). It includes surveillance, testing and training issues, which in many cases are advised regardless of algorithmic trading status.

National Competent Authorities survey market data for breaches of MAR using data that is sent to them by Investment Firms under MiFID II Transaction Reporting (RTS 22). This article on the Reuters web site makes mention of the fact that despite glitches in the data, the FCA plan to improve data quality and use the information in the near future.

The speech made by Julia Hoggett of the FCA last November (see here) made it clear that the FCA would be taking anti abuse matters, and the application of MAR, very seriously in future. This article on Lexology by Claire Cross of Corker Binning analyses the speech, and reads it as a signal of increased scrutiny of those who break MAR erroneously. There is now an expectation of adequate process and anti abuse measures, where ignorance is not considered a defence.

This article on The Market Mogul takes a contrarian view to the issue of insider trading, partially arguing that the prohibition in fact makes markets less efficient. It also looks at the developing insider trading rules in China. In terms of enforcement, this article on The Hindu Business Line looks at the efforts made by SEBI, the regulator in India, to clear the backlog of enforcement cases, icnlduign manipulation cases.

The issues around anti abuse legislation and implementation of surveillance systems will be discussed today at Energy Risk’s Trade Surveillance for Energy Trading Firms” course (see here).

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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