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Combatting market abuse within algorithmic trading in the financial and physical markets
Journal of Financial Compliance,
6
(2),
113-122
(2023)
Abstract
The objective of this paper is to provide an overview of the challenges regarding algorithmic trading for traders, trading venues and regulators. The complexity of algorithmic trading is set out, as well as the implications for markets. The paper gives insight into the uncertainty arising from this complexity, and sets out what compliance measures are useful and what a governance framework should look like when considering algorithmic trading. It also provides details of the types of market manipulation that relate to algorithmic trading, what can be done against it and to what extent these measures and controls work.
Keywords: algorithmic trading; market manipulation; pre-trade and post-trade controls; kill switch; order-to-trade ratio; direct electronic access; governance framework
The full article is available to subscribers to the journal.
Author's Biography
Jerry De Leeuw After completing his studies in economics, Jerry became a professional option trader on the trading floor of the Exchange in Amsterdam for almost a decade. In 1999 he established his own successful trading company, member of Euronext, licensed by the Dutch supervisory body, and clearing agreements with Goldman Sachs. At the Anglo-Dutch energy exchange APX-Endex, Jerry, responsible for the development of the continental gas markets (2007), visited the dealing rooms of members throughout Europe. Thereafter, Jerry (author of 16 books) founded Entrima, a training agency for professionals in the commodity and energy markets, to offer learning solutions for the ever-increasing complexity in (and of) the markets. Next, he founded the Market Abuse Centre, a provider of learning services in the field of conduct, behaviour and ethical awareness.
