FCA publishes paper on algorithmic trading compliance

Algorithmic trading is set to come under more intense scrutiny, as United Kingdom financial authorities have today demanded that institutions increase awareness and safety controls surrounding the electronic trading mechanisms.

In an explanatory document accompanying its 28-page report, as well as the PRA's document, the FCA acknowledges that automated technology "can amplify certain risks" for the markets, in addition to offering "significant benefits to investors, including increased execution speed and reduced costs".

"This report summarises our key areas of focus, and highlights examples of good and poor practice", the FCA adds, noting that it is based on a number of "cross-firm reviews on themes related to alorithmic trading".

Banks and other firms may have to meet tougher requirements to manage risks stemming from algorithmic trading in the U.K.as markets become increasingly computer-driven, the Bank of England said on Monday.

Although this offers obvious efficiency benefits, the PRA is anxious that trading "can occur at rapid speeds, which means that existing risks could be amplified if risk management and other controls are not effective". It is therefore essential that key oversight functions, including compliance and risk management, keep pace with technological advancements. Firms should consider and act on its content in the context of good practice for their business.

The FCA said it will focus on five areas regarding algorithmic trading, including making sure firms can define it and ensuring firms can monitor for potential conduct issues and reduce market abuse risks from algorithmic trading. This is an area of continuing collaboration and we will continue to work with the PRA to ensure we are coordinated in our approaches going forward.

Related Articles

  • Brokerages Anticipate Dunkin Brands Group Inc (DNKN) to Post $0.63 EPS

    This repurchase authorization allows the restaurant operator to repurchase shares of its stock through open market purchases. Dunkin' Brands Group, Inc.'s insider ownership stands at 0.53 percent, while its insider transaction is 0 percent.
    Most Asian markets advance after Wall Road's Friday rebound; oil costs rise

    Most Asian markets advance after Wall Road's Friday rebound; oil costs rise

    ENERGY: Benchmark U.S. crude gained 98 cents to $60.18 per barrel in electronic trading on the New York Mercantile Exchange. The regional index , MSCI Asia-Pacific, expanded by 1% compensating some of the loses from last week, when wiped out 7.3%.
    PTI optimist to retain NA-154 Lodhran-I seat

    PTI optimist to retain NA-154 Lodhran-I seat

    The Election Commission of Pakistan has also issued a notice to both candidates for their violations. Polling for the NA-154 Lodhran-I by-election was underway which would continue till 05:00pm.
  • Russian Military Test Fires New Upgraded Air Defense Missile

    Russian Military Test Fires New Upgraded Air Defense Missile

    On February 12, the Russian military conducted a successful test launch of a modernised ABM missile. It is also part of an existing system of early missile warning and space control.
    Idris Elba Proposes to Girlfriend in Front of Packed London Cinema

    Idris Elba Proposes to Girlfriend in Front of Packed London Cinema

    He has a 16-year-old daughter, Isan, with first wife Hanne "Kim" Norgaard, to whom he was married from 1999 to 2003. His intended is Sabrina Dhowre , a model he met past year while filming The Mountain Between Us with Kate Winslet .
    Bruno Mars bringing tour to TD Garden in Boston

    Bruno Mars bringing tour to TD Garden in Boston

    Earlier this month the pop star announced that he would stop in Denver as part of his 24K Magic Tour but he didn't reveal when. The date is part of a round of newly released shows that kicks off September 7 in Denver and wraps October 27 in Los Angeles.
  • (FDX) Shares Sold by IFP Advisors Inc

    This is calculated by taking weekly log normal returns and standard deviation of the share price over one year annualized. The firm owned 38,735 shares of the shipping service provider's stock after selling 459 shares during the quarter.
    Dubai makes record for housing world's tallest hotel, yet again

    Dubai makes record for housing world's tallest hotel, yet again

    The world's tallest hotel is three times taller than London's Big Ben, 56 metres taller than Paris's Eiffel Tower. The gleaming gold 75-storey Gevora Hotel stands 356 metres, or almost a quarter of a mile tall.
    Trump Plans to Privatize the International Space Station

    Trump Plans to Privatize the International Space Station

    Ted Cruz (R-Tex.) said he hoped recent reports of NASA's decision to end funding of the station "prove as unfounded as Bigfoot". All or part of the ISS has been in low Earth orbit since 1998 and the station has been continuously inhabited since 2000.
  • OPPO A71 2018 With AI-Powered Selfie Launched in India - Price, Specifications

    OPPO A71 2018 With AI-Powered Selfie Launched in India - Price, Specifications

    The main highlight of the smartphone is its AI-Beauty Recognition technology which helps in shooting better selfies. Bluetooth 4.2 is also a part of this package, while the phone measures 143.1 x 73.8 x 7.6mm, and weighs 137 grams.
    Cavs teach Celtics a lesson

    Cavs teach Celtics a lesson

    As the Cavaliers opened a 27-point lead midway through the fourth, the crowd began chanting "We want Paul Pierce! ". The Pistons have lost two straight after winning five in a row, including four with the newly acquired Griffin.

    Comerica Incorporated (NYSE:CMA)'s Trend Unknown, Especially After Increased Shorts

    Clint Carlson increased its stake in Comerica Inc (CMA) by 14.62% based on its latest 2017Q3 regulatory filing with the SEC. A number of other hedge funds and other institutional investors have also recently bought and sold shares of the business.