Dutch Regulator Works to Develop Better Algorithm Controls
- Regulator is working with ESMA to improve pre-trade controls
- Follows joint research project with the Oxford-Man Institute
As artificial intelligence advances, regulators are racing to understand how they can best monitor algorithmic trading.
Photographer: Spencer Platt/Getty ImagesThis article is for subscribers only.
The Dutch Authority for the Financial Markets is working with the European Securities and Markets Authority and other supervisors to assess how trading firms can improve algorithm pre-trade controls to ensure that erroneous orders do not cause disorderly market conditions.
The controls, brought in under MiFID II, require algo traders to check factors including the price and volume of every order before sending to the market, to prevent inaccuracies creating dramatic swings. Supervisors are collectively working on strengthening the rules, with a report likely to be published at the beginning of next year.