FIA and FIA European Principal Traders Association (FIA EPTA) have responded to the European Securities and Markets Authority’s proposed introduction of new requirements on circuit breakers as part of the authority’s MiFIR Review third consultation package.
Circuit breakers are volatility control mechanisms used by trading venues to pause trading temporarily to protect against extreme volatility events. The associations support ESMA’s proposed new requirements, which align with FIA’s best practice paper for automated trading risk controls, published in July 2024.
“We strongly endorse the increased transparency mandated to trading venues regarding circuit breakers. This aligns with FIA’s commitment to promoting clarity in market safeguards,” the response says. “By ensuring that market participants have access to clear information about the types of circuit breakers, their calibration, and the specific circumstances leading to their activation, the proposed changes will improve market integrity, enhance the price discovery process, and provide participants with the relevant information to be better prepared in times of high volatility.”
Read the full response.
