mlsanityData to 14 Oct 2026

Safe and Compliant Cross-Market Trade Execution via Constrained RL and Zero-Knowledge Audits

arXiv 2510.04952 ↗First posted 6 Oct 2025cs.AI cs.DCcited by 2

On the map: Deep reinforcement learning methods → Adversarial robustness and RL in finance

Abstract (arXiv)

We present a cross-market algorithmic trading system that balances execution quality with rigorous compliance enforcement. The architecture comprises a high-level planner, a reinforcement learning execution agent, and an independent compliance agent. We formulate trade execution as a constrained Markov decision process with hard constraints on participation limits, price bands, and self-trading avoidance. The execution agent is trained with proximal policy optimization, while a runtime action-shield projects any unsafe action into a feasible set. To support auditability without exposing proprietary signals, we add a zero-knowledge compliance audit layer that produces cryptographic proofs that all actions satisfied the constraints. We evaluate in a multi-venue, ABIDES-based simulator and compare against standard baselines (e.g., TWAP, VWAP). The learned policy reduces implementation shortfall and variance while exhibiting no observed constraint violations across stress scenarios including elevated latency, partial fills, compliance module toggling, and varying constraint limits. We report effects at the 95% confidence level using paired t-tests and examine tail risk via CVaR. We situate the work at the intersection of optimal execution, safe reinforcement learning, regulatory technology, and verifiable AI, and discuss ethical considerations, limitations (e.g., modeling assumptions and computational overhead), and paths to real-world deployment.

Key facts. Cited by 2 papers in the map (data through 14 Oct 2026). Placed in Adversarial robustness and RL in finance, one of 15 directions in Deep reinforcement learning methods. Builds on 7 of its 20 references that are in the map. First posted on arXiv 6 Oct 2025.

Builds on

7 of 20 references.

References · 7

  1. 2017Constrained Policy Optimizationcited by 983
  2. 2018Safe Exploration in Continuous Action Spacescited by 247
  3. 2018Double Deep Q-Learning for Optimal Executioncited by 43
  4. 2020Safe Reinforcement Learning via Projection on a Safe Set: How to Achieve Optimality?cited by 34
  5. 2020Verifiably Safe Exploration for End-to-End Reinforcement Learningcited by 34
  6. 2022Provably Safe Reinforcement Learning: Conceptual Analysis, Survey, and Benchmarkingcited by 34
  7. 2019ABIDES: Towards High-Fidelity Market Simulation for AI Researchcited by 32

Built on by

Cited by year (2026 to 14 Oct)

Citing papers per year: 2026: 2.

2 papers.

Similar, not cited

Close in wording, no citation either way

  1. 2026AlphaCrafter: Harnessing Multi-Agent Workflows for Cross-Sectional Quantitative Trading
  2. 2025Right Place, Right Time: Market Simulation-based RL for Execution Optimisation
  3. 2026SHARP: A Self-Evolving Human-Auditable Rubric Policy for Financial Trading Agents
  4. 2025TradeTrap: Are LLM-based Trading Agents Truly Reliable and Faithful?
  5. 2023Towards Generalizable Reinforcement Learning for Trade Execution
  6. 2026Reinforcement Learning for Execution under Dynamic Fees in a Closed-Loop DEX Simulator
  7. 2026Constrained Policy Optimization for Provably Fair Order Matching
  8. 2026When AI Agents Meet MEV: Cross-Chain Arbitrage in the Agentic Economy