Keeping up with rule changes and ensuring oversight of direct electronic access (DEA) are among the compliance priorities for the Montreal Exchange in the coming year, the TMX Group derivatives exchange announced Tuesday.
A notice from the MX regulatory division highlights its compliance priorities for the year ahead, including ensuring that firms update their policies and procedures to reflect rule changes, provide proper oversight of DEA clients and properly register employees with electronic access.
These priorities are based on the division’s work during the past year, including the results of compliance examinations, market analyses and investigations, the MX notice says.
In particular, firms should be documenting, at least annually, that a client with direct electronic access meets MX standards, including the rules regarding electronic trading. Some firms are failing to ensure that automated order systems used by DEA clients are tested annually, the notice says.
Alongside its compliance priorities the MX will create a working group to examine uses for artificial intelligence (AI) and machine learning, launch its new “participants portal,” and provide firms with a scorecard detailing their regulatory performance, among other things.
The exchange will also publish a semiannual newsletter to share best practices, provide information about its regulatory operations and report fines imposed for minor violations.