FCA Rolls Out New Rules, Accountability Measures for Algo and HFT Traders
- The FCA’s latest regulatory mandate will see the extension of its rules to algo and HFT traders across banks, building societies, and PRA firms.
The Financial Conduct Authority (FCA), the UK's paramount regulatory authority, has published the final iteration of its rules mandate, thereby confirming its approach to strengthening individual accountability across algorithmic and High-Frequency Trading (HFT) High-Frequency Trading (HFT) High-frequency trading (HFT) is a trading approach that requires the usage of high-powered computer applications to execute a large volume of orders within milliseconds. HFT employs pre-programmed trading commands and a multitude of complex algorithms.These are used to analyze multiple markets simultaneously while automatically executing trades based on preprogrammed trading scenarios for varying market conditions. Speed is of the essence with HFT, where traders with the fastest rates tend to be High-frequency trading (HFT) is a trading approach that requires the usage of high-powered computer applications to execute a large volume of orders within milliseconds. HFT employs pre-programmed trading commands and a multitude of complex algorithms.These are used to analyze multiple markets simultaneously while automatically executing trades based on preprogrammed trading scenarios for varying market conditions. Speed is of the essence with HFT, where traders with the fastest rates tend to be Read this Term), according to an FCA statement.
More specifically, the FCA’s latest regulatory mandate will see the extension of its rules to algo and HFT traders across banks, building societies, and Prudential Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term Authority (PRA) designated investment firms.
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The decision to help shore up accountability for traders and individuals across the banking sector represents the latest effort by the regulator to help many global regulators that have taken concerted efforts to fortify their respective compliance measures in this realm across several jurisdictions. In terms of the FCA, these latest rules follow earlier efforts from the PRA to help bolster individual accountability in the banking sector.
Firms will have until September 7, 2016 to implement a series of new rules, namely the extension of two new functions- client dealing and algorithmic trading. The rules themselves will also come into effect in less than a month- on March 7, 2016- and apply to senior managers and certification regimes at the same time.
In addition, the newly unveiled rules will also include a broad-based tranche of accountability reforms such as proposals for regulatory references for candidates applying for senior management positions, as well as significant harm functions under the certification regime in banks, building societies, credit unions, PRA-designated investment firms and insurers.
According to Tracey McDermott, the acting Chief Executive at the FCA in a recent statement on the rules: “Today we made rules that will extend the certification regime to more fully capture people carrying out certain wholesale activities. We are determined to embed a culture of personal responsibility within the banking sector. Clear individual accountability should focus minds, drive up standards, and make firms easier to run and to supervise. And if things go wrong, it will allow senior managers to be held to account for misconduct that falls within their area of responsibility."
The Financial Conduct Authority (FCA), the UK's paramount regulatory authority, has published the final iteration of its rules mandate, thereby confirming its approach to strengthening individual accountability across algorithmic and High-Frequency Trading (HFT) High-Frequency Trading (HFT) High-frequency trading (HFT) is a trading approach that requires the usage of high-powered computer applications to execute a large volume of orders within milliseconds. HFT employs pre-programmed trading commands and a multitude of complex algorithms.These are used to analyze multiple markets simultaneously while automatically executing trades based on preprogrammed trading scenarios for varying market conditions. Speed is of the essence with HFT, where traders with the fastest rates tend to be High-frequency trading (HFT) is a trading approach that requires the usage of high-powered computer applications to execute a large volume of orders within milliseconds. HFT employs pre-programmed trading commands and a multitude of complex algorithms.These are used to analyze multiple markets simultaneously while automatically executing trades based on preprogrammed trading scenarios for varying market conditions. Speed is of the essence with HFT, where traders with the fastest rates tend to be Read this Term), according to an FCA statement.
More specifically, the FCA’s latest regulatory mandate will see the extension of its rules to algo and HFT traders across banks, building societies, and Prudential Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term Authority (PRA) designated investment firms.
Test your knowledge, win a prize! Take the Finance Magnates quiz...
The decision to help shore up accountability for traders and individuals across the banking sector represents the latest effort by the regulator to help many global regulators that have taken concerted efforts to fortify their respective compliance measures in this realm across several jurisdictions. In terms of the FCA, these latest rules follow earlier efforts from the PRA to help bolster individual accountability in the banking sector.
Firms will have until September 7, 2016 to implement a series of new rules, namely the extension of two new functions- client dealing and algorithmic trading. The rules themselves will also come into effect in less than a month- on March 7, 2016- and apply to senior managers and certification regimes at the same time.
In addition, the newly unveiled rules will also include a broad-based tranche of accountability reforms such as proposals for regulatory references for candidates applying for senior management positions, as well as significant harm functions under the certification regime in banks, building societies, credit unions, PRA-designated investment firms and insurers.
According to Tracey McDermott, the acting Chief Executive at the FCA in a recent statement on the rules: “Today we made rules that will extend the certification regime to more fully capture people carrying out certain wholesale activities. We are determined to embed a culture of personal responsibility within the banking sector. Clear individual accountability should focus minds, drive up standards, and make firms easier to run and to supervise. And if things go wrong, it will allow senior managers to be held to account for misconduct that falls within their area of responsibility."