Scila co-hosted Compliance Roundtable in Frankfurt

On January 21st, FIMAS and their partners Scila AB and the law firm JASKULLA | THOMAS | RECHTSANWÄLTE organized a round table in Frankfurt, Germany, on the topic of “Compliance”.

The main focus of the event was the special organizational requirements for algorithmic trading of financial institutions and possible solutions to fulfill these obligations. After Marco Lerche, a consultant at FIMAS, gave a short overview on the increasing regulation, Dr. Ekkehard Jaskulla, an experienced lawyer specialized in the field of financial markets law, presented the latest developments in requirements for algorithmic and high frequency trading.

With the HFT act of May 14, 2013, the German regulator had already introduced many new obligations for providers of high frequency trading systems. The goal was to strengthen the stability and integrity of financial markets and to reduce potential risks of algorithmic trading. The organizational requirements for algorithmic traders defined in § 33 paragraph 1a WpHG were detailed in a BaFin circular (6/2013 BA) in December 2013. With this circular, the guidelines on “Systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities” which were defined by the European Securities and Markets Authority (ESMA) are implemented into national law.

In practice, it will be necessary to adapt internal processes and IT systems so that automatic pre-checks, real-time monitoring and emergency concepts can be realized. With this in mind, the participants of the round table discussed intensively when and under which circumstances these special requirements become effective in an automated trading environment. When the criteria for algorithmic trading are fulfilled, affected institutions are faced with new challenges in their organizational structure. As of today, many compliance tasks are still carried out manually. With the new regulations this process will reach its limits. At the round table event the Swedish software provider Scila demoed a compliance tool which is already used for trading surveillance at Deutsche Börse Group. This tool enables trading firms, banks, brokers and providers of trading platforms as well as clearing houses to combine all relevant data in one application and create human readable statistics and reports. Only with this kind of automated system it will be possible to comply with the BaFin obligations to monitor system behavior in real-time.

For more information:

Lars-Ivar Sellberg
Executive Chairman
Phone +46 733 47 87 10

About Scila AB Scila is a FinTech company based in Stockholm, Sweden, but we act globally. Scila provides trading surveillance products built on many years of experience from both market surveillance and systems design. Scila systems use modern technology to give the customer a seamless route from detection of market abuse to presentable evidence. Scila delivers the future in modern market surveillance technology by offering trading venues, regulators and market participants the most competitive solution available.
For additional information about Scila AB, please visit www.scila.se