This website uses cookies to enhance your experience and to help us improve the site. If you continue without changing your settings, we will assume that you are happy to receive these cookies. You can change your cookie settings at any time. For more information on which cookies we use then please refer to our Cookie Policy. Following global initiatives to regulate HF and algo trading, the Hong Kong Securities and Futures Commission SFC will launch new requirements, under the Code of Conduct for Persons Licensed by or Registered with the SFC Code of Electronic and Fund Manager Code of Conduct, to regulate algo traders, in addition to the service providers of internet trading 2 and direct market access 3 DMA on 1 January This client alert looks at the new regulatory framework and suggests a road map to prepare for compliance with it. At the end of Marchthe SFC published its consultation conclusions on the regulation of electronic trading 4 http: It intends to implement the new requirements on electronic trading on 1 Januaryby way of amendments to the Code of Conduct and the Fund Trading of Conduct. The new requirements capture electronic trading of securities and futures contracts traded on exchanges, as well as leveraged foreign exchange trading 5 off the exchanges. They target 2 categories of SFC system and registrants:. Dark pool and ATP operators in Hong Kong are usually licensed for Type 7 regulated system i. As some of the licensing conditions are similar to the new requirements, such operators may already be in significant compliance. However, it will be worthwhile to conduct a gap analysis to assess if this is the case. It is also likely that the SFC will revisit the current licensing conditions in the near future. Overseas operators of dark pools and ATPs authorized under Part III of the Securities and Futures Ordinance are excused from complying with the new Code of Conduct. However, they are likely to be affected by another SFC policy initiative on dark pools and automated trading services intended for public consultation later this year. HF traders and market makers trading securities on their own accounts with definition investors in Hong Kong definition generally exempted from licensing with the SFC. Interestingly, if they want to have direct trading rights in the Stock Exchanges of Hong Kong Limited Definitionthey must first be licensed for Type 1 regulated activity i. That means, they will be subject to the amended Code of Conduct. In general, the amended Code of Conduct and Fund Manager Code of Conduct create new obligations relating to:. The regulatory reach of the SFC is expanding beyond licensed players for example, your clients electronic system developers in the electronic trading world. This can make compliance of the amended Code of Conduct and Fund Manager Code of Conduct difficult because licensees and registrants, in practice, may not have full access to and control of their clients and trading systems. It is important to manage your risk in this area, as the regulators will penalise trading and both your organisation and senior management are at risk. Here are some steps you should be taking now. Unscrupulous or undisciplined users of automated trading systems are potentially disruptive influences and undermine such integrity. Therefore, if, in the past, your systems were designed with primarily commercial requirements in mind, do review them with this in mind. Now such systems are specifically expected to operate in the interests of the integrity of the market 7 and prevent manipulative or abusive trading activities 8. You can build in some self-protection through contractual provisions albeit this is not a complete solution with your clients and system developers. For example, where you provide DMA to institutional clients, you may restrict the scope of sub-delegation and seek remedies for use by unlicensed persons in your client agreements. Good knowledge about your clients and their trading activities helps you design your pre-trade controls. The electronic trading system that you are providing to clients or, using, may not be owned by you. In most cases, you only have a licence to use the system and have no access to technical information about the system. If this is the case, now is the time to initiate a dialogue with your system developers so that key features are transparent to you. Where appropriate, you may also consider changing your arrangements to enable you to maintain audit logs and keep system records. To prepare for the new requirements, you may now start updating your electronic trading system and compliance policies and procedures. Training to staff is also important, so that they will be aware of the new operating risks. Hong Kong Co-Chief Exec Hayden Flinn says Hong Kong can be an independent jurisdiction for the resolution of disputes on China's Belt and Road. The Nanjing Court has enforced a CIETAC Hong Kong arbitral award in Mainland China for the first time, bolstering its claim as an institution of choice for Belt and Road disputes. It is provided only for your information and does not constitute legal or other advice on any specific matter. If you require or seek legal advice you should obtain such advice from your own lawyer, and should do so before taking, or refraining from taking, any action in reliance on this publication. Your location Global Australia Belgium China Germany Hong Kong Italy Singapore Spain UAE United Kingdom United States. Global Australia Belgium China Germany Hong Kong Italy Singapore Spain UAE United Kingdom United States. New Hong Kong regulations in Introduction At the end of Marchthe SFC published its consultation conclusions on the regulation of electronic trading 4 http: Are you the new targets? They target 2 categories of SFC licensees and registrants: HF traders and market makers trading through computer algorithms; and asset managers and hedge funds managers using computer algorithms as their investment or trading strategies. System of the new requirements In general, the amended Code of Conduct and Fund Manager Code of Conduct create new obligations trading to: Specific requirements Service providers User. You might also be interested in. Hayden Flinn talks Belt and Road with TVB in Hong Kong. Hong Kong Co-Chief Exec Hayden Flinn says Hong Kong can be an independent jurisdiction for the resolution of disputes on China's Belt and Road 19 June Belt and Road risks and mitigation strategies. Enforcement milestone for CIETAC HK in China. Subscribe to KWM electronic Site map.
How Electronic Trading Is Changing Tomorrow's Trading Floor
How Electronic Trading Is Changing Tomorrow's Trading Floor
5 thoughts on “Electronic trading system definition”
Over the course of the novel, these characters slowly overcome their guilt, and come to realize that their greatest responsibility to the dead is to go on living.
Beowulf hears that king Hrothgar is having trouble and immediately comes to help with no questions asked. he defeats the monster, Grendel, with his bare hands.
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Over the course of the novel, these characters slowly overcome their guilt, and come to realize that their greatest responsibility to the dead is to go on living.
Beowulf hears that king Hrothgar is having trouble and immediately comes to help with no questions asked. he defeats the monster, Grendel, with his bare hands.
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Neuroscientists have discovered the seat of human compassion.