Blockchain-Enabled Regulatory Reporting and Audit Trails for High-Frequency Trading Systems
Keywords:
blockchain, high-frequency trading, regulatory reportingAbstract
Blockchain may improve HFT regulatory reporting and audit trails. Distribution ledger technology enables stock exchanges and digital asset markets retain immutable transactions for tamper-resistant deal execution records, research shows. Smart contract cryptographic timestamps show regulatory, compliance, and questionable transactions live. Order management, clearinghouses, blockchain, and market monitoring study HFT latency optimization and high-throughput consensus. Authentication, cryptography, and distributed consensus integrity decrease systemic and operational risk. Decentralized compliance, hyper-low-latency trading system transparency, accountability, and auditability enhance. Blockchain may improve fraud, regulation, and market integrity.
Downloads
References
Vishnia, G. R., & Frontiers Research Group. (2020). AuditChain: A trading audit platform over blockchain. Frontiers in Blockchain, 3, Article 9.
Regueiro, C., & Martínez, P. (2021). A blockchain-based audit trail mechanism: Design and implementation. Algorithms, 14(12), 341.
Liu, J., & Zhang, Y. (2021). Applying blockchain for primary financial markets: A survey. IET Blockchain.
European Securities and Markets Authority (ESMA). (2021). Final Report on Algorithmic Trading and the Functioning of MiFID II in Relation to Algorithmic Trading (ESMA70-156-4572). Paris: ESMA.
Association for Financial Markets in Europe (AFME). (2022). AFME’s response to ESMA’s DLT pilot call for evidence / MiFID II review documents. AFME.
International Organization of Securities Commissions (IOSCO). (2019). Principles for Financial Market Infrastructures and implications for DLT use cases. IOSCO Reports.
KPMG. (2021). Use of DLT in Financial Market Infrastructures (FMI). KPMG Insights (industry briefing).
Zohar, A., & Narayanan, A. (2018). Blockchain and financial market infrastructure: Opportunities and challenges for regulators. Journal of Financial Regulation, 4(2), 105–132.
Mougayar, W. (2016). The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology. Wiley.
Gomber, P., Arndt, B., Lutat, M., & Uhle, T. (2016). High-frequency trading and algorithmic trading: Overview and regulatory perspectives. Journal of Trading, 11(4), 7–20.
ASIC / Australian Securities & Investments Commission. (2018). Report on High-Frequency Trading in Australian Equities. ASIC Report (republished/background documents referenced in HFT literature).
Financial Stability Board (FSB). (2017). Financial Stability Implications from FinTech: Supervisory and Regulatory Issues that Merit Authorities’ Attention. FSB Background Paper.
Deloitte. (2020). Blockchain in capital markets: Transforming post-trade processes and auditability. Deloitte Insights.
Schuh, S., & Shy, O. (2019). Auditability and audit trails for automated trading systems: Technical and legal considerations. Financial Services Law Journal, 24(1), 45–78.
Chong, A., & Kim, H. (2020). Real-time regulatory reporting: architectures and latency trade-offs for HFT environments. Proceedings of the ACM Workshop on Financial Technology Systems.
Peters, G. W., & Panayi, E. (2016). Understanding modern banking ledgers through blockchain technologies: Implications for auditing and regulatory reporting. Journal of Financial Regulation and Compliance, 24(3), 258–277.
World Economic Forum & Deloitte. (2020). Inclusive Deployment of Blockchain for Supply Chains: Part 4 — Proof of Concept and Pilot Guidance. (Relevant for DLT pilot governance lessons applicable to capital markets.)
IOSCO & CPSS/Bank for International Settlements (BIS). (2015). Working Group papers on market data, trade reporting and surveillance; implications for DLT adoption. BIS Papers.
Huckle, S., & White, M. (2016). Fintech, blockchain and the evolution of audit practices. Journal of Digital Banking, 1(1), 66–79.
European Commission. (2020). Consultation and technical papers on MiFID II / MiFIR review and transaction reporting; consolidated tape and audit trail improvements. European Commission staff working documents.
