The Financial Conduct Authority (FCA) published a multi-firm review of principal trading firms’ compliance with MiFID Regulatory Technical Standards 6 (RTS 6), assessing algorithmic trading control frameworks and highlighting good and poor practices. The review does not create new requirements, but is intended to support firms’ compliance with existing RTS 6 obligations and supervisory expectations. The FCA’s sample covered 10 principal trading firms and examined firms’ most recent RTS 6 self-assessments, validation reports and supporting evidence, supplemented by data requests and meetings. While the overall quality of self-assessments and governance has improved since the FCA’s 2018 work, it found wide variation in sophistication and compliance, including gaps such as incomplete self-assessments and out-of-date policies, variable technical understanding and involvement by compliance functions, and weaknesses in documentation and accountability for deployment and “material change” processes. Further issues included inconsistent testing approaches and record keeping (conformance and simulation testing), unclear ownership and oversight of pre- and post-trade controls, and surveillance arrangements that had not kept pace with firms’ trading activity in some cases, leading to weaknesses in alert investigation governance and resourcing. All reviewed firms received individual feedback, and the FCA used attestations where appropriate to ensure progress. The FCA encouraged principal trading firms engaged in algorithmic trading to use the findings to strengthen their control frameworks and said it will continue to assess algorithmic trading controls through ongoing supervision.

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