ESMA finds convergence in automated trading supervision: An ESMA peer review has found increased convergence in supervision of automated trading across Europe. It also noted several new challenges for supervisors, in terms of:

  • market complexity and IT knowledge: given the complexities of high-frequency trading, both the boards of the trading platforms and staff at supervisors need increased IT expertise; 
  • on-site inspections: ESMA recommends further interaction between supervisors and trading platforms in on-site inspections;
  • resourcing of supervisors so they have enough staff to properly supervise trading platforms;
  • testing of trading halts: ESMA calls on regulators to proactively test trading algorithms against stressed trading environments; and 
  • cyber-crime: ESMA found that there are very few programmes for setting up a proper ring fence against cyber-attacks and that national regulators could co-ordinate better.

(Source: ESMA Finds Convergence in Automated Trading Supervision)