FCA flags algorithmic trading concerns

Firms must improve compliance and risk standards

Mike Sheen
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Complex nature of algorithmic trading means poor oversight could turn "manageable errors into extreme events with potentially wide-spread implications"
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Complex nature of algorithmic trading means poor oversight could turn "manageable errors into extreme events with potentially wide-spread implications"

The Financial Conduct Authority (FCA) has highlighted a number of concerns about the compliance and risk standards of firms employing algorithmic trading techniques.

In a report entitled Algorithmic Trading Compliance in Wholesale Markets, published on Monday (12 February), the regulator said the complex nature of algorithmic trading means poor oversight could turn "manageable errors into extreme events with potentially wide-spread implications". The FCA said recent cross-firm reviews of principal traders, investment banks and investment managers had found "further improvement is needed in a number of areas". Specifically, some firms "lacked a suitable process to identify algorithmic trading across their business and did not have appropriate docum...

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