Sungard's Magnus Almqvist looks at the implications of Guildeline 2012/122.
The passage of the
Dodd Frank Act, the Market Abuse Directive (MAD) and MiFID, as
well as the newly issued Guideline 2012/122 from the European
Securities and Markets Authority (ESMA), which covers
algorithmic and direct market access (DMA) electronic trading,
is clear evidence that the regulation of financial markets
continues to go through unprecedented rate of
The pace of regulatory change is not only
unprecedented – it’s speeding up. In
December 2011, ESMA issued an initial set of guidelines around
algorithmic and direct market access electronic trading. The
final requirements, Guideline 2012/122 or "Systems and controls
in an automated trading environment for trading platforms,
investment firms and competent authorities," were released in
February 2012 and came into force on May 1.
Guideline 2012/122 is significant. It covers both
client and proprietary trading and affects firms engaged in
purely with proprietary trading as well as those offering DMA,
who now need to surveil and report on trading activities
performed by their DMA clients.
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