Tighter regulations in MiFID II mean all trading firms using any form of trading algorithm (which includes most forms of electronic trading) need to invest in a new way of testing their algorithms or face ceasing trading.
Senior management will be held responsible for any lack of testing that results in their trading causing or contributing to market disorder.
MiFID II imposes new obligations on investment firms governing non-live testing of algorithms on a vast range of instruments. Firms must now certify that they have tested their trading algos to avoid contributing to market disorder. These changes represent a paradigm shift in the way that algorithms are tested and in the type of test environments required on which to test them to meet regulatory requirements.
You must act now if you want to ensure that your organisation is:
Combining a proven test environment with consultancy expertise SQS is now working in partnership with TraderServe to provide a managed testing service, combining TraderServe’s proven and sophisticated test environment AlgoGuard which emulates real world market micro structures, coupled with the unparalleled testing consultancy expertise of SQS.
Only by properly testing within a realistic dynamic orderbook and environment, such as AlgoGuard, which can pass or fail algorithms based upon their contribution to market disorder, can algorithmic traders be sure of becoming compliant with MiFID II’s new non-live testing requirements ahead of the deadline.