25 May 2015

44975

Retired Member

905Posts 2,936,140Views 1,190Comments

Please lock the door behind you

25 July 2014  |  2433 views  |  0

Under MiFID II European regulators introduce new rules around algorithmic trading. Whether it’s algo IDs, enhanced audit trails or business clock synchronisation, none of these items would have been on the agenda if it were not for the rapid innovation in information technology over the past decade.

Now ESMA is extending its reach into cyberspace, discussing issues such as cyber security monitoring for unwarranted access, system or data interference, communication interception or two-factor authentication. But I wonder why they are proposing such detailed requirements? Firstly, the MiFID II mandate looks much vaguer and does not even mention cyber security explicitly. Secondly, cyber security is very much a matter of self-interest for all companies, as illustrated by the Target case.

Back in the so-called ‘good old days’, when computers were the stuff of science fiction books and the trading pits were full of screaming men, security was about choosing the right filing cabinet and installing strong door locks. Then, and today, security came at a price and guaranteed 100% safety was, and is, something of a myth. Before settling on any regulatory requirements around cyber security that could raise the fixed costs of doing business for everyone, some carefully conducted cost-benefit analysis is required. Maybe that analysis will show that for smaller or less tech-savvy firms it is still sufficient to lock their doors behind them.

 

TagsTrade executionRisk & regulation

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Latest posts from Retired

Banking on biometrics

17 May 2015  |  1473 views  |  1  |  Recommends 0 TagsSecurityInnovation

Flagging on the road to transparency

27 April 2015  |  3207 views  |  0  |  Recommends 0 TagsTrade executionRisk & regulation

Left in the dark

26 March 2015  |  2741 views  |  0  |  Recommends 1 TagsTrade executionRisk & regulation

Holding a steady course

12 March 2015  |  2611 views  |  0  |  Recommends 0 TagsTrade executionRisk & regulation

Analysis dialysis

24 February 2015  |  1576 views  |  0  |  Recommends 0 TagsRetail bankingInnovation

Retired's profile

job title
location
member since 2014
Summary profile See full profile »

Retired's expertise

What Retired reads
Retired writes about

Who's commenting on Retired's posts

Noel Peatfield
Karim Maalouf
Ketharaman Swaminathan
Sreeram Yegappan
AMIT GARG
Tony Wenzel
Melvin Haskins