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Dubai Financial Services Authority (DFSA): Contents

Dubai Financial Services Authority (DFSA)
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  • AMI A1.3.1

    (1) An Authorised Market InstitutionG must implement standardised conformance testing procedures to ensure that the systems which its MembersG are using to access facilities operated by it have a minimum level of functionality that is compatible with the Authorised Market Institution'sG information technology systems and will not pose any threat to fair and orderly conduct of its facilities.
    (2) An Authorised Market InstitutionG must also require its MembersG , before commencing live operation of any electronic trading system, user interface or a trading algorithm, including any updates to such arrangements, to use adequate development and testing methodologies to test the viability and effectiveness of their systems.
    (3) For the purposes of (2), an Authorised Market InstitutionG must require its MembersG :
    (a) to adopt trading algorithm tests, including tests in a simulation environment which are commensurate with the risks that such a strategy may pose to itself and to the fair and orderly functioning of the facility operated by the Authorised Market InstitutionG ; and
    (b) not to deploy trading algorithms in a live environment except in a controlled and cautious manner.
    Derived from RM118/2013 [VER15/07-13]

    • AMI A1.3.1 Guidance

      When assessing whether the trading algorithm testing plan of its MembersG is adequate and appropriate and implemented effectively, an Authorised Market InstitutionG should consider whether:

      a. it includes testing where the markets in which the algorithm is to be used change in structure;
      b. the MemberG has taken into account any limits that are being placed on the number of InvestmentsG to be traded on, and the value and number of orders to be sent to, the facility operated by the Authorised Market InstitutionG ;
      c. the algorithm works effectively in stressed market conditions, including whether it can be switched off in appropriate circumstances; and
      d. it includes adequate independent auditing of the Member'sG testing procedures.
      Derived from RM118/2013 [VER15/07-13]