Algorithmic Trading (Amendment) Regulations, 2024

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 21,323, 4 ta’ Ottubru, 2024

L.N. 250 of 2024

FINANCIAL MARKETS ACT

(CAP. 345)

INVESTMENT SERVICES ACT

(CAP. 370)

Algorithmic Trading (Amendment) Regulations, 2024

IN EXERCISE of the powers conferred by article 49 of the

Financial Markets Act, and article 12 of the Investment Services Act,

the Minister responsible for the regulation of financial services, acting

on the advice of the Malta Financial Services Authority, has made the

following regulations

(1) The title of these regulations is the Algorithmic Citation, scope

Trading (Amendment) Regulations, 2024 and these regulations shall and

commencement.

be read and construed as one with the Algorithmic Trading S.L.

Regulations, hereinafter referred to as the "principal regulations".

(2) The scope of these regulations is to transpose Article

6(2)(a) of the Directive (EU) 2022/2556 of the European Parliament

and of the Council of 14 December 2022 amending Directives 2009/

65/EC, 2009/138/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU, 2014/

65/EU, (EU) 2015/2366 and (EU) 2016/2341 as regards digital

operational resilience for the financial sector.

(3) The provisions of these regulations shall come into force

on the 17th January, 2025.

In sub-regulation (1) of regulation 2 of the principal Amends

regulations, immediately after the definition "direct electronic access" regulation

the principal

there shall be added the following new definition

regulations.

" "DORA Regulation" means Regulation (EU) 2022/2554 of

the European Parliament and of the Council of 14 December 2022 on

digital operational resilience for the financial sector and amending

Regulations (EC) No 1060/2009, (EU) No 648/ 2012, (EU) No 600/

2014, (EU) No 909/2014 and (EU) 2016/1011, as may be amended

from time to time, and includes any binding legal instruments,

guidelines and other measures that have been or may be issued

thereunder;".

Regulation 3 of the principal regulations shall be Amends

regulation 3 of

the principal

regulations.

substituted by the following new regulation

3. A Maltese investment firm that engages

"Requirements

applicable to

in algorithmic trading shall have in place

investment firms

engaging in

algorithmic trading.

(a) effective systems and risk controls

suitable to the business it operates to ensure

that its trading systems are resilient and have

sufficient capacity in accordance with the

requirements stipulated in Chapter II of the

DORA Regulation, are subject to appropriate

trading thresholds and limits and prevent the

sending of erroneous orders or the systems

otherwise functioning in a manner that may

create or contribute to a disorderly market;

(b) effective systems and risk controls

to ensure the trading systems cannot be used

for any purpose that is contrary to MAR or to

the laws and, or rules of a trading venue to

which it is connected; and

(c) effective

business

continuity

arrangements to deal with any failure of its

trading systems, including ICT business

continuity policy and plans and ICT response

and recovery plans established in accordance

with Article 11 of the DORA Regulation, and

shall ensure its systems are fully tested and

properly monitored to ensure that they meet

the general requirements stipulated in this

regulation and any specific requirements

stipulated in Chapters II and IV of the DORA

Regulation.".

€0.09