European Securities and Markets Authority publishes supervisory briefing to harmonise oversight of algorithmic trading under MiFID II

The European Securities and Markets Authority has published a supervisory briefing intended to support consistent supervision of algorithmic trading across the EU. Aimed at National Competent Authorities, it provides practical tools and clarified expectations for supervising firms engaged in algorithmic trading under MiFID II. The briefing targets areas where supervisory approaches have diverged, covering pre-trade controls, governance arrangements, testing frameworks and the outsourcing of algorithmic trading systems. It also addresses emerging issues linked to the expanding use of artificial intelligence in algorithmic trading, setting out considerations to help supervisors assess new risks and evaluate whether firms are deploying advanced technologies in a robust and responsible way; the document is positioned as a nonbinding supervisory convergence tool that complements existing requirements. ESMA will share the briefing with National Competent Authorities for day-to-day supervision, and will monitor market and technological developments with the option to update the briefing or develop further convergence tools.