Esma published its final 'Guidelines on systems and controls in an automated trading environment for trading platforms, investment firms and competent authorities' in December. The proposals call on exchange trading venues to make arrangements for monitoring high frequency traders and to put in place mechanisms for throttling trading activity during times of high market stress.

Trading firms would be expected to assess the adequacy of pre-trade controls and IT at member firms, while investors who use algorithmic trading strategies would be required to have appropriate governance procedures in place for developing, buying and testing the technology.

Following its publication in December, the European body has officially translated the proposed rules into all the official languages of the EU, triggering a transitional period of two months within which national supervisors have to declare whether they intend to comply with the guidelines.

According to Esma regulations, national supervisors have to make every effort to comply with the guidelines. Those who decline will have to explain the reasons for non-compliance which would be made public by Esma.