Commission Delegated Regulation (EU) 2017/589 of 19 July 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the organisational requirements of investment firms engaged in algorithmic trading (Text with EEA relevance)

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• Assess nature, scale and complexity of your algorithmic trading business

s.art001

General organisational requirements(Article 17(1) of Directive 2014/65/EU)

• Establish formal governance for trading systems and algorithms

s.art002

Role of the compliance function(Article 17(1) of Directive 2014/65/EU)

• Ensure compliance staff understand algorithmic trading and maintain contact with technical experts and kill-function controllers

s.art003

Staffing(Article 17(1) of Directive 2014/65/EU)

• Employ competent staff for algorithmic trading and maintain their skills

s.art004

IT outsourcing and procurement(Article 17(1) of Directive 2014/65/EU)

• Take full responsibility for outsourced or procured algorithmic trading systems

s.art005

General methodology(Article 17(1) of Directive 2014/65/EU)

• Establish and maintain testing methodologies for algorithmic trading systems

s.art006

Conformance testing(Article 17(1) of Directive 2014/65/EU)

• Test conformance of algorithmic trading systems before deployment or after changes

s.art007

Testing environments(Article 17(1) of Directive 2014/65/EU)

• Test algorithmic trading systems in a separate environment from live production

s.art008

Controlled deployment of algorithms(Article 17(1) of Directive 2014/65/EU)

• Set predefined limits before deploying a trading algorithm

s.art009

Annual self-assessment and validation(Article 17(1) of Directive 2014/65/EU)

• Perform annual self-assessment and validation of algorithmic trading systems

s.art010

Stress testing(Article 17(1) of Directive 2014/65/EU)

• Stress-test your algorithmic trading systems annually

s.art011

Management of material changes(Article 17(1) of Directive 2014/65/EU)

• Review and communicate changes to algorithmic trading systems

s.art012

Kill functionality(Article 17(1) of Directive 2014/65/EU)

• Maintain a kill functionality for algorithmic trading

s.art013

Automated surveillance system to detect market manipulation(Article 17(1) of Directive 2014/65/EU)

• Install and maintain automated surveillance system to detect market manipulation

s.art014

Business continuity arrangements(Article 17(1) of Directive 2014/65/EU)

• Have business continuity arrangements for algorithmic trading systems

s.art015

Pre-trade controls on order entry(Article 17(1) of Directive 2014/65/EU)

• Implement pre-trade controls, throttles and risk limits for algorithmic trading

s.art016

Real-time monitoring(Article 17(1) of Directive 2014/65/EU)

• Monitor algorithmic trading in real time for disorderly conduct

s.art017

Post-trade controls(Article 17(1) of Directive 2014/65/EU)

• Continuously operate post-trade controls for algorithmic trading

s.art018

Security and limits to access(Article 17(1) of Directive 2014/65/EU)

• Implement IT security and governance for algorithmic trading systems

s.art019

General provisions for DEA(Article 17(5) of Directive 2014/65/EU)

• Set rules to ensure your DEA clients follow trading venue rules

s.art020

Controls of DEA providers(Article 17(5) of Directive 2014/65/EU)

• Apply and control pre-trade and post-trade controls for each DEA client

s.art021

Specifications for the systems of DEA providers(Article 17(5) of Directive 2014/65/EU)

• Implement trading systems and procedures to control DEA client orders and risks

s.art022

Due diligence assessment of prospective DEA clients(Article 17(5) of Directive 2014/65/EU)

• Conduct due diligence on prospective DEA clients

s.art023

Periodic review of DEA clients(Article 17(5) of Directive 2014/65/EU)

• Perform annual review of due diligence and client systems

s.art024

Systems and controls of investment firms acting as general clearing members(Article 17(6) of Directive 2014/65/EU)

• Assess, control and monitor clearing systems

s.art025

Due diligence assessments of prospective clearing clients(Article 17(6) of Directive 2014/65/EU)

• Assess clearing clients before trading and review them annually

s.art026

Position limits(Article 17(6) of Directive 2014/65/EU)

• Set and enforce trading and position limits for clearing clients

s.art027

Disclosure of information about the services provided(Article 17(6) of Directive 2014/65/EU)

• Publish your clearing service terms and explain protection levels

s.art028

Content and format of order records(Article 17(2) of Directive 2014/65/EU)

• Record and keep high-frequency algorithmic trading orders for five years