Risk control extension for BATS Chi-X Europe

Venue operator BATS Chi-X Europe has extended its pre-trade risk tools for trading participants and included an order kill switch.

By None

Venue operator BATS Chi-X Europe has extended its pre-trade risk tools for trading participants and included an order kill switch.

The move comes a week after a similar roll out in BATS US venues.

Participants can set parameters for orders to avoid erroneous trades without latency issues on inbound orders to BATS Chi-X Europe’s BXE and CXE venues.

Clients can set order restrictions, maximum per-order limits, order cut-offs and a kill switch which cancels all open orders and blocks new orders to isolate harmful market events.

The pre-trade risk tools were previously available only to participants offering sponsored access to clients but are now offered across the board. They are designed to work alongside a trading firm's internal safeguards.

Impending European legislation will force both trading firms and venues to offer stricter risk practices, which BATS Chi-X Europe CEO Mark Hemsley said was the driver for extending the risk tools.

“We will continue to engage proactively with regulators and policymakers on the potential development of market-wide risk controls for a safe, more resilient pan-European market environment,” Hemsley said.

“The ability to manage effectively risk at multiple layers of the trading cycle has become increasingly essential, with pre-trade risk checks at the exchange level as well as the participant level,” he said, adding the tools offered an additional layer of controls in relation to obligations under the ESMA guidelines on systems and controls in an automated environment.

Last Tueday, BATS Chi-X Europe’s US sister company, BATS Global Markets, began offering all trading members the same risk management tools for the BATS BZX Exchange, BYX Exchange and BATS Options venues.

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