Electronic trading, or e-trading, platforms keep evolving to meet changing market needs such as complex trading strategies and multi-asset class coverage. That, along with a rising number of trading venues, protocols and products have spawned challenges not just for traders and risk managers, but clients, too, who are demanding greater transparency and control over execution quality.

The changing structure of financial markets and gaps in risk management can turn otherwise manageable errors in the course of e-trading into extreme events with widespread ramifications, including regulatory fines. One of the most tumultuous events in recent history – the Covid-19 pandemic – has contributed to an increase in e-trading volumes on the one hand and frequent breaches of risk parameters on the other. All this calls for resilience in e-trading infrastructure and a tighter risk-management regime.

In this paper, we evaluate and compare different regulatory asks across the world and highlight approaches that help strengthen compliance. We also explore the possibility of using automation as a tool to overhaul e-trading risk-management processes.