Redkite Financial Markets, a specialist provider of market surveillance systems, has generated the world’s first ever ESMA alert.
The alert was generated at 9:05am on 2 May, the first day of European trading, following the 1 May deadline for firms to comply with ESMA’s guidelines on systems and controls in an automated trading environment. The alert related to potential ‘quote stuffing’, a form of manipulative trading activity, that involves entering large numbers of orders and/or cancellations/updates to orders to camouflage a particular strategy, or to create uncertainty for other participants, slowing down their process.
Robert Kay, CEO, Redkite Financial Markets, says: “Redkite’s suite of ESMA alerts are live and installed successfully among our global client base. ESMA’s compliance deadline, which came into force this morning, the first day of European trading after the May Day public holiday, means that all market participants using automated strategies now need the tools in place to monitor and identify potentially abusive trading practices activities in real-time; these include ‘Momentum Ignition’, ‘Ping Orders’, ‘Quote Stuffing’ and ‘Advanced Layering’.”
Kay says: “Shortly after market opening, Redkite’s surveillance system generated the first alert for one of our European institutional clients. This confirms the commitment to our clients to ensure that compliance officers have the systems in place to alert them to potentially manipulative behaviour as soon as regulators recommend.”
