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Version status: In force | Document consolidation status: Updated to reflect all known changes
Version date: 3 January 2018 - onwards
Version 2 of 2

Regulation 72 Systems resilience, circuit breakers and electronic trading

(1) A regulated market shall have in place effective systems, procedures and arrangements to ensure that its trading systems -

(a) are resilient,

(b) have sufficient capacity to deal with peak order and message volumes,

(c) are able to ensure orderly trading under conditions of severe market stress,

(d) are able to reject orders that exceed predetermined volume and price thresholds or are clearly erroneous, and

(e) ensure that algorithmic trading systems cannot create or contribute to disorderly trading conditions on the market and manage any disorderly trading conditions which do arise from such algorithmic trading systems, including -

(i) by requiring members or participants to carry out appropriate testing of algorithms and providing environments to facilitate such testing, and

(ii) by limiting the ratio of unexecuted orders to transactions that may be entered into the system by a member or participant, by being able to slow down the flow of orders if there is a risk of its system capacity being reached and by limiting and enforcing the minimum tick size that may be executed on the market,

and that are fully tested to ensure the conditions in subparagraphs (a), (b) and (c) are met and are subject to effective business continuity arrangements to ensure continuity of its services if there is any failure of its trading systems.