The second edition of the REMIT Best Practice Report is now available, offering a full update of the previous version, plus an all new section on best practices regarding algorithmic trading.

This comprehensive review of how to comply with REMIT, related to inside information and market abuse, is intended as a guide to best practice, helping market participants ensure they have implemented the right measures to comply with REMIT and thereby limit their risk of misconduct.

It describes options for market participants to develop and maintain an effective compliance regime, with particular regard to the requirements and prohibitions related to inside information and market abuse.

For the second edition of the REMIT Best Practice Report we again sought input and knowledge-sharing from 10 market participants, one sector organisation and our own experts on REMIT and market monitoring. Their combined experience and varying points of view gave invaluable perspective to help us produce a balanced and wide-reaching report establishing a common approach on REMIT compliance.

In the second edition, we developed recommendations on how to design, test, approve and monitor algorithms, including specific suggestions for when you purchase your algorithms from a software vendor. Market participants are recommended to have a governance model, including a formalised approval procedure, in place for their algorithms. This also means that market participants should have the necessary skills and technical expertise to understand how their algorithms work.

Our aim has been to create a report giving guidance to all types of market participants, with a presentation of the central points for consideration when building an entity-specific compliance manual. That said, only you can decide how best to assess the compliance risks your organisation faces and design a compliance regime accordingly. We hope this report may help.

New Section on Erroneous Orders

A new section of the REMIT Best Practice Report, covering erroneous orders, is now available. This section outlines a best practice approach for preventing and mitigating the risk of erroneous orders and for handling them should they occur. The section is published as a stand-alone document while the group works on a new overall revised version of the REMIT Best Practice Report.