Knowledge Base

← Market Functioning and Organization

Questions

Which article of MiFID II structures the obligations applicable to firms engaged in algorithmic trading?

Article 15
Article 17
Article 20
Article 25

What are the quantitative criteria set by Article 19 of RTS 565 to qualify an activity as high-frequency trading (HFT)?

One message per second per instrument or two messages per second across all instruments
Two messages per second per instrument or four messages per second across all instruments
Three messages per second per instrument or six messages per second across all instruments
Five messages per second per instrument or ten messages per second across all instruments

Layering or spoofing involves unbalancing the order book by placing orders with no intention of execution in order to obtain execution on the opposite side of the book.

True
False

How long must records be retained for high-frequency trading (HFT) activities under MAR?

One year
Three years
Five years
Ten years

Definition of HFT under MiFID II

Click to see answer

Commission Delegated Regulation (EU) 2017/589, known as RTS 6, details the organisational requirements applicable to algorithmic trading.

True
False

Categorize items by dragging them to the appropriate zones

Items to categorize:

Automatic price bands, maximum order values and volumes
Alerts generated within five seconds transmitted to the trader and an independent risk function
Continuous assessment of market and credit risks with real-time exposure calculations
Categories:

Pre-trade controls

Real-time monitoring

Post-trade controls

According to Article 4(1)(39) of MiFID II, what legal definition applies to algorithmic trading?

Any trading in financial instruments where an algorithm automatically determines order parameters with limited or no human intervention
Any trading in financial instruments where a human determines order parameters
Any trading in financial instruments where an algorithm is used to analyse market trends
Any trading in financial instruments where an algorithm is used to generate performance reports