Algorithm Testing is a topic covered by both Swiss and European regulation and refers to the trading venue's obligation to require participants to test algorithms and to provide a facility to support that testing.
SIX Swiss Exchange already provides an environment for members to be able to test and self-certify their algorithms on the market.
Art. 30: Guarantee of orderly trading
Art. 31 (para 2 let e): Algorithmic trading and high-frequency trading
- MiFID II;
Art. 48 (para 6, para 12 let g): Systems resilience, circuit breakers and electronic trading
RTS 7 (Art. 8, 9, 10): organisational requirements of regulated markets, multilateral trading facilities and organised trading facilities enabling or allowing algorithmic trading through their systems
Q: Do you intend to require participants to pre-register all algorithms before use?
A: No, this is not planned. All algorithms used in the submission of orders to the exchange will need to be identified as described under the Algorithm Flagging section, but we are not planning on having pre-registration.
Q: Is the exchange planning to track and register each algorithm to ensure it has passed testing before going into production?
A: No, members are responsible for adequate testing of their algorithms before production trading.