U.S. regulators scrutinize risk controls for high-frequency trading

U.S. regulators scrutinize risk controls for high-frequency trading

NEW YORK –  U.S. regulators are taking a deep look at automated trading firms to determine whether adequate risk controls are in place to prevent major technology glitches or at least minimize their impact.

The Financial Industry Regulatory Authority said on Thursday it sent out targeted examination letters to 10 high-frequency trading firms this week asking for detailed information on the testing and supervision of trading algorithms and other software.

FINRA also asked the firms to describe any instances in which they had a malfunction with an algorithm or trading engine that had a major financial impact to the firm or caused a market disruption.

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One Response to U.S. regulators scrutinize risk controls for high-frequency trading

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