Automated technology brings significant benefits to investors, including increased execution speed and reduced costs. However, it can also amplify certain risks. It is therefore essential that key oversight functions, including compliance and risk management, keep pace with technological advancements.
The report focuses on five key areas within algorithmic trading compliance in wholesale markets:
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Defining Algorithmic Trading
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Development and Testing Process
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Risk Controls
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Governance and Oversight
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Market Conduct
Megan Butler, Director of Supervision – Investment, Wholesale and Specialist at the FCA, said: 'This report is relevant for all firms developing and using algorithmic trading strategies in wholesale markets. Firms should consider and act on its content in the context of good practice for their business.'
Full report
© FCA - Financial Conduct Authority
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