Regulatory Alerts2026-04-01
ESMA Supervisory Briefing on Algorithmic Trading in the EU
ESMA issued non-binding supervisory guidance to standardize EU oversight of algorithmic trading under MiFID II by clarifying regulatory definitions, testing protocols, and pre-trade control requirements. The briefing mandates that investment firms retain full compliance responsibility for all algorithmic systems, including those outsourced or accessed via Direct Electronic Access, while requiring rigorous stress testing and documentation for any material strategy updates. Additionally, the guidance aligns existing MiFID II governance frameworks with the new AI Act and provides practical templates to ensure consistent supervisory convergence across member states.
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