The best-documented trading-bot disasters were failures of ordinary software and risk controls, not of machine-learning “AI.” Knight Capital lost more than…
This was the SEC’s first enforcement action under its market access rule, Rule 15c3-5 (SEC). The SEC’s account is a code-deployment and controls failure. Real-time monitoring (Article 16).
Key takeaways
- Pre-trade controls (Article 15) and surveillance for manipulation (Article 13) complete the framework (legislation.gov.uk).
- The staff report points to a large automated sell program using a volume-based execution algorithm, amplified by high-frequency trading activity…
- Is high-frequency trading illegal?
The sources in this article describe regulation of algorithmic and high-frequency trading through controls and obligations, not a ban.
Read the full article: https://www.ainvasion.com/knight-capital-flash-crash/
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