ICE Futures US has given notice of 2015 rule changes and issued FAQ clarifications on Disruptive Trading Practices. It is only four pages long, and has some interesting specifics on manipulative and disruptive practices, but I was struck by the implications from a data ownership and governance perspective.
We already knew that executions, position and previous activity were relevant to determining whether a trader’s action and intent is innocent or guilty, and have under EMIR and Dodd-Frank submitted large amounts of data that intends to help regulators piece these things together from a systemic risk perspective. The FAQ reminds us that from a Market Abuse perspective more is required than for system risk reporting.
Fairly obviously data on orders for instance is necessary evidence for market manipulation discussions, not just executions. The FAQ also introduces the capitalisation (presumably in an economic or prudential regulatory sense) of the market participant as relevant in the same context, and the ‘market conditions’ at the time of the order.
Tangentially, I wondered when it was that someone last asked the question of who has read/write access to the historic audit trail of market orders within a trading organisation, especially in an automated trading context where the front office may well maintain its own algorithms and data feeds?
With MAD2, MAR, and REMIT implementation on the agenda for 2015 in Europe, CIOs, Information Security and Compliance Officers might consider taking a look not only at whether this information is already fed into internal surveillance capabilities, but also whether the ownership and control of this raw data is appropriately controlled and supervised.
The ICE Futures FAQ is to be found here.