ESMA guidelines on automated trading

Responding to concerns such as the US ‘flash crash’ of 2010, ESMA has published detailed guidelines covering systems and controls in an automated trading environment. Andrew Shrimpton and Nick Inman explain their implications for various UK firms.

Andrew Shrimpton is a member and Nick Inman a director at Kinetic Partners. They may be contacted at andrew.shrimpton@kinetic-partners.com and nick. inman@kinetic-partners.com.

These are the first guidelines made under Article 16(3) of their new powers. ESMA will not be supervising the implementation of the guidelines. The FSA published the guidelines on its website under the ‘Miscellaneous’ section on 3 April 2012.