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Protocols and Procedures: Ensuring that your algo FX trading services are deployed in a safe and compliant manner

June 2023 in Previous Features

Most interaction with wholesale FX market venues will involve the use of some form of decision “algorithm”, in addition to those services that are traditionally thought of as “automated execution algorithms”. It is essential to design these systems for safe, orderly operation and for regulatory compliance. The various regulations provide many aspects to consider in relation to the deployment, operation and review of algorithmic trading. We present below some high-level points for thinking about algorithmic systems in FX, the regulatory issues that apply, and the implications for systems design and algorithmic choices.

Electronic trading has increased to around two thirds of global spot FX transaction volumes (BIS survey, 2016; spot is the most mature electronic FX market) and this proportion will be considerably higher when measured by the number of transactions. Most interaction with wholesale FX market venues will involve the use of algorithms of some sort. These may be explicitly deployed by the user, via automated trading and execution systems, or be embedded in dealing interfaces used to access the venues Electronic trading has increased to around two thirds of global spot FX transaction volumes (BIS survey, 2016; spot is the most mature electronic FX market) and this proportion will be considerably higher when measured by the number of transactions. Most interaction with wholesale FX market venues will involve the use of algorithms of some sort. These may be explicitly deployed by the user, via automated trading and execution systems, or be embedded in dealing interfaces used to access the venues

Electronic trading has increased to around two thirds of global spot FX transaction volumes (BIS survey, 2016; spot is the most mature electronic FX market) and this proportion will be considerably higher when measured by the number of transactions. Most interaction with wholesale FX market venues will involve the use of algorithms of some sort. These may be explicitly deployed by the user, via automated trading and execution systems, or be embedded in dealing interfaces used to access the venues

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