UK: PRA consults on proposed expectations regarding firms' governance and risk management of algorithmic trading

The Prudential Regulation Authority has published a consultation paper in respect of its proposed expectations regarding firms' governance and risk management of algorithmic trading: see here (pdf). The consultation paper includes, as an appendix, the supervisory statement that the PRA intends to publish. The PRA is proposing that a firm's governing body should be required to explicitly approve the governance framework for algorithmic trading. A review of firms by the PRA completed between November 2014 and March 2017 revealed that not all firms’ algorithmic trading activities were adequately captured in their governance frameworks.