FINRA’s 2025 focus on algorithmic & HFT surveill
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Posted On: 07/10/2025 1:11:55 PM
FINRA’s 2025 focus on algorithmic & HFT surveillance
FINRA’s 2025 Annual Regulatory Oversight Report, published on January 28, 2025, emphasizes that market integrity remains front and center—particularly around manipulative practices tied to algorithmic and high‑frequency trading (HFT). The report highlights FINRA’s intention to assess firms’ pre‑implementation testing of algorithms, monitoring of trading systems post‑deployment, and robustness of firm‑wide “kill‑switch” controls .
Additionally, industry commentary notes that in 2025, FINRA is intensifying enforcement efforts around Reg BI, the Consolidated Audit Trail (CAT), market manipulation, and cybersecurity .
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CFTC’s internal ethics probes
On May 5, 2025, the CFTC officially announced that an undisclosed number of staff were placed on administrative leave pending investigations involving potential violations of ethics rules and professional conduct—some tied to the high-profile Traders Global Group (“My Forex Funds”) fraud case . Acting Chair Caroline Pham also publicly acknowledged the agency faced court sanctions for “willful and bad‑faith conduct,” prompting a swift reorganization of the Division of Enforcement, issuance of new self-reporting guidelines, and stronger cultural oversight .
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Why it matters — regulatory significance
• FINRA’s tightening of algorithmic controls reflects a broader push for firms to build, test, and supervise trading systems capable of resisting manipulative techniques like layering, spoofing, and momentum ignition .
• The CFTC’s internal investigations signal a recalibration toward ethical compliance and transparency within the agency itself—while simultaneously rolling out policies that incentivize firms to voluntarily self-report minor issues and target more serious misconduct .
FINRA – 2024 Annual Regulatory Oversight Report
Focuses on algorithmic/HFT surveillance, pre-trade testing, and kill-switches under the Market Access Rule.
Link: https://www.finra.org/sites/default/files/202...report.pdf 
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⚖️ CFTC – Staff on Leave Pending Investigation (May 5, 2025)
Announces staff placed on administrative leave due to ethics violations; ongoing investigations.
Link: https://www.cftc.gov/PressRoom/PressReleases/9071-25 
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???? CFTC – Acting Chair Pham on Court Sanctions (May 13, 2025)
Details reforms within the Division of Enforcement following court sanctions in the My Forex Funds case.
Link: https://www.cftc.gov/PressRoom/PressReleases/9074-25 
FINRA’s 2025 Annual Regulatory Oversight Report, published on January 28, 2025, emphasizes that market integrity remains front and center—particularly around manipulative practices tied to algorithmic and high‑frequency trading (HFT). The report highlights FINRA’s intention to assess firms’ pre‑implementation testing of algorithms, monitoring of trading systems post‑deployment, and robustness of firm‑wide “kill‑switch” controls .
Additionally, industry commentary notes that in 2025, FINRA is intensifying enforcement efforts around Reg BI, the Consolidated Audit Trail (CAT), market manipulation, and cybersecurity .
⸻
CFTC’s internal ethics probes
On May 5, 2025, the CFTC officially announced that an undisclosed number of staff were placed on administrative leave pending investigations involving potential violations of ethics rules and professional conduct—some tied to the high-profile Traders Global Group (“My Forex Funds”) fraud case . Acting Chair Caroline Pham also publicly acknowledged the agency faced court sanctions for “willful and bad‑faith conduct,” prompting a swift reorganization of the Division of Enforcement, issuance of new self-reporting guidelines, and stronger cultural oversight .
⸻
Why it matters — regulatory significance
• FINRA’s tightening of algorithmic controls reflects a broader push for firms to build, test, and supervise trading systems capable of resisting manipulative techniques like layering, spoofing, and momentum ignition .
• The CFTC’s internal investigations signal a recalibration toward ethical compliance and transparency within the agency itself—while simultaneously rolling out policies that incentivize firms to voluntarily self-report minor issues and target more serious misconduct .
FINRA – 2024 Annual Regulatory Oversight Report
Focuses on algorithmic/HFT surveillance, pre-trade testing, and kill-switches under the Market Access Rule.
Link: https://www.finra.org/sites/default/files/202...report.pdf 
⸻
⚖️ CFTC – Staff on Leave Pending Investigation (May 5, 2025)
Announces staff placed on administrative leave due to ethics violations; ongoing investigations.
Link: https://www.cftc.gov/PressRoom/PressReleases/9071-25 
⸻
???? CFTC – Acting Chair Pham on Court Sanctions (May 13, 2025)
Details reforms within the Division of Enforcement following court sanctions in the My Forex Funds case.
Link: https://www.cftc.gov/PressRoom/PressReleases/9074-25 
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