Options, a provider of cloud-based IT services to hedge funds, private equity houses, investment banks, trading firms and broker-dealers, is to offer TraderServe’s exchange emulated test environment, AlgoGuard as a managed solution.
AlgoGuard is a solution for the testing of trading algorithms in line with the European Securities and Markets Authority's recent final submission on regulatory technical standards for the financial instrument directive, MiFID II. The MiFID II requirements, which become mandatory from 3 January 2017, necessitate that all trading firms certify that their algorithms have been tested to ensure that they do not create or contribute to disorderly trading conditions before being deployed in live markets. The AlgoGuard technology is currently the only commercially available solution to test these mandatory requirements in production at a major exchange. The solution uniquely emulates live market environments, including simulation of stressed market conditions in order to fully test algorithms against the key behaviours that contribute to market disorder events, such as a flash crash.
TraderServe Technical Director, Nick Idelson, says: “AlgoGuard offers a pass/fail testing solution against predetermined indicators of disorderly market behaviour and allows for the testing of algorithms that trade multiple markets. In the wake of ESMA’s latest recommendations TraderServe are delighted to be bringing this solution to the market alongside such an experienced managed service provider as Options.”
Options CTO, John Bryant (pictured), adds: “TraderServe’s AlgoGuard platform not only provides clients with a tailored solution on an individual investment firm basis, it also provides a realistic non-live testing environment that doesn’t disclose the algorithms being tested. Given ESMA’s recommendations and the fast-approaching deadline facing investment firms, the joint offering from TraderServe and Options will ensure these firms achieve MiFID II compliance in a timely and efficient manner.’
