Under Swiss law pre-trade controls refer to the trading venue's obligation to have controls in place to reject orders that exceed pre-determined volume and price thresholds or are clearly erroneous.
MiFID II requires a minimum of pre-trade controls for each traded instrument which are price collars, maximum order value and maximum order volume.
In order to be compliant with the Swiss and European Regulation, in addition to the existing circuit breakers, SIX Swiss Exchange as well as SIX Corporate Bonds will implement the following controls: price collars, maximum order value and maximum order volume by instrument.
|Price collars||The system should automatically block or cancel orders that do not meet certain parameters|
|Maximum order value||The system should automatically block or cancel orders if the value exceeds a certain limit|
|Maximum order volume||The system should automatically block or cancel orders if the order size exceeds a certain limit|
Details of limits and implementation is scheduled for 2017.
Art. 30: Guarantee of orderly trading
Art. 30 (para. 2 lit. d): Guarantee of orderly trading
- MiFID II;
Art. 48 (para. 4): Systems resilience, circuit breakers and electronic trading
RTS 7 (Art. 18, 20): Organisational requirements of regulated markets, multilateral trading facilities and organised trading facilities enabling or allowing algorithmic trading through their systems