Regulation 9 Regulation 3 of the Recognition Requirements Regulations

Regulation 3 of the Recognition Requirements Regulations (interpretation) is amended as follows.

In paragraph (1), in the definition of “high-frequency algorithmic trading technique”^f1, in paragraph (c), after “high message intraday rates” insert “(see regulation 3A)”.

After paragraph (3) insert—

“(4)

For the purposes of the definition of “algorithmic trading” in paragraph (1)^f2, 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.

(5)

For the purposes of the definition of “direct electronic access” in paragraph (1)^f3, a person is to be considered not capable of electronically transmitting orders relating to a financial instrument directly to a trading venue where either or both of the following apply—

(a)

that person cannot exercise discretion regarding—

(i)

the exact fraction of a second of order entry, and

(ii)

the lifetime of the order within that timeframe;

(b)

the electronic transmission of orders takes place through arrangements for optimisation of order execution processes that determine the parameters of the order other than the trading venue where the order should be submitted, unless these arrangements are embedded into that person’s systems and not into those of—

(i)

the member or participant of a regulated market or of a multilateral trading facility, or

(ii)

a client of an organised trading facility.”.