OREANDA-NEWS. On 17 June 2009 was announced, that effective RTS starts regulating activities of algo trading systems.

For this purpose the so called trading robots that are connected to the exchange directly without using Internet trading systems will be subjected to certification, and the number of transactions  not subject to transaction fee will be limited at 2,000 transactions per trading day (from 6:00 pm on day N till 5:45 pm on day N+1).

If the established threshold number of transactions (2,000 transactions) is hit, the transaction fee will be applied to transactions that did not result in execution of a trade, i.e bid/offers posted. In this case the transaction fee will be calculated based on the ratio between the transaction fees charged for executed trades and the total number of bids/offers. One rouble in transaction fees covers a maximum of 20 free of charge bids/offers which do not lead to a trade. For each transaction exceeding the threshold value the account holder will be charged 10 kopecks. Not more than 0.01% of all FORTS accounts will be subject to this fee.

"Lately the Russian market has been experiencing an expansion in algo trading. The trading robots raise the efficiency of trading, automate decision making and execution, and reduce the risk of loss related to trader’s operational mistakes. At the same time a lot of them have flaws. It creates excessive load for the systems of both the broker and the exchange and may hinder full-fledged trading by other participants. Algo trading needs to be regulated by both the exchange and brokerage companies that are interested in providing premium services to their clients", - says Roman Goryunov, RTS CEO.

"Regulating trading activities in this way is a common global practice. Though trading robots generate a significant share of the trading volume, the interests of the other market participants cannot be neglected. These regulations suggested by RTS look quite reasonable and will facilitate higher quality of algo trading, as the limitations are imposed only on the less effective trading systems", - says Evgeny Dankevich, Managing Director of OTKRITIE Brokerage house.

The decision to regulate  algo trading systems  was passed by the RTS Board of directors based on the recommendation of the Derivatives Market Committee and negotiations with trading participants. The new regulations comply with the global practice of regulating algo trading.