Paragraph 8 “High-frequency algorithmic trading”F1

Changes not yet applied. Later legislation changes this provision in ways not yet written into the text below:

Sch. 3 para. 1(k) words substituted by Financial Services and Markets Act 2000 (Regulated Activities) 2025 art. 2(a)
Sch. 3 para. 1A inserted by Financial Services and Markets Act 2000 (Regulated Activities) 2025 art. 2(b)
Sch. 3 para. 2(a) words inserted by Financial Services and Markets Act 2000 (Regulated Activities) 2025 art. 2(c)(i)
Sch. 3 para. 2(a)(i) words inserted by Financial Services and Markets Act 2000 (Regulated Activities) 2025 art. 2(c)(ii)
Sch. 3 para. 2(c) words inserted by Financial Services and Markets Act 2000 (Regulated Activities) 2025 art. 2(c)(iii)

(1)

This paragraph applies for the purposes of the exemptions in paragraph 1(e), (f) and (k).

(2)

“Algorithmic trading” means trading in financial instruments where a computer algorithm automatically determines individual parameters of orders such as whether to initiate the order, the timing, price or quantity of the order or how to manage the order after its submission, with limited or no human intervention, and does not include any system that is only used for the purpose of routing orders to one or more trading venues or for the processing of orders involving no determination of any trading parameters or for the confirmation of orders or the post-trade processing of executed transactions.

(3)

A system is to be considered as having limited or no human intervention where, for any order or quote generation process or any process to optimise order-execution, an automated system makes decisions at any of the stages of initiating, generating, routing or executing orders or quotes according to pre-determined parameters.

(4)

A “high-frequency algorithmic trading technique” is an algorithmic trading technique characterised by—

(a)

infrastructure intended to minimise network and other types of latencies, including at least one of the following facilities for algorithmic order entry—

(i)

co-location,

(ii)

proximity hosting, or

(iii)

high-speed direct electronic access,

(b)

system-determination of order initiation, generation, routing or execution without human intervention for individual trades or orders, and

(c)

high message intraday rates which constitute orders, quotes or cancellations.

Annotations

Textual amendments

F1: Sch. 3 Pt. 3 inserted (23.10.2025) by The Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025 (S.I. 2025/1020), regs. 1(2), 8(3) (with reg. 17); S.I. 2025/1078, reg. 2(b) (with reg. 11)

Notes on Schedule 3

Textual amendments

F1: Sch. 3 substituted (31.12.2020) by The Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1403), regs. 1(3), 4(8) (with savings in S.I. 2019/680, reg. 11 (as amended by S.I. 2019/1233, regs. 1(3), 3 and S.I. 2019/710, regs. 1(2), 16(2)(c)); 2020 c. 1, Sch. 5 para. 1(1)