Europe to vote on new HFT regulations July9th: The European Parliament will vote on July 9 to ratify the European Commission's controversial new regulatory proposals, including plans to slow down high-speed traders. Markus Ferber, the German centre-right lawmaker steering the reforms through the European Parliament, wants trading orders to be forced to stay in the market for at least 500 milliseconds, or half a second, before they can be cancelled. The world's fastest exchanges currently trade in less than 100 microseconds, or one ten thousandth of a second, so a resting time of 500 milliseconds would mean these trades were being slowed down by a factor of 5,000. The proposals have prompted concern among the traders who argue they are simply using technology to glean a competitive advantage, something that traders have always done. from: http://www.reuters.com/article/2012...rbssFinancialServicesAndRealEstateNews&rpc=43
i wager a pound they dont pass this. once the hft/algo mob ( the usual suspects - rsj getco ) get wind of this and complain, whinge and backhander the right people in the chain then funnily enough nothing will happen. cancel their cheating front running business model. i dont think so. naive to believe this will happen.
half a second won't make any difference. what a joke these laws are. more like 5 minutes or don't bother putting a bid or sell and taking it off. the market is just like an auction, bids and sell orders are BINDING and you better have the cash t o pay for it and better have the shares to deliver it..at the present the market is a joke. borderline scam market. virtual market. and you better have the cash at close to settle. or this market is a virtual video game.
what is so controversial about it. either you have fair market or b.s. market. The reason these HFT have been tolerated is they are like 70% of exchange fee revenues and fees the SEC receives. everytime a trade goes through HFT pays the SEC fees. call the SEC fees now if volume drops 70% these brokers, exchanges and SEC stand to lose a lot of 'revenues'--it's about the money.
The exchange like the NYSE and CME were 'non-profits' and tokyo stock exchange is non-profit. there is a reason they are non-profit exchanges. with for-profit exhange, they sell out to market participants who contribute the most revenue whic h are the HFT machines and market makers...
A pity, as I'd be eager to see what a 1/2 second minimum would do, especially if there were no exemptions (excemptions being a major problem with almost all quoting rules/fees/etc. in the past -- many exchanges, and perhaps even some politicians, seem to want to give blanket exemptions to certain large firms, making the rules worse-than-useless in the end). My guess is that a 1/2 second minimum for quotable orders would increase "usable" liquidity, not decrease it as some detractors (generally HFT firms themselves) have claimed. But who knows for sure -- it would have been nice if the Europeans had given it a shot to see what happens, in practice.
Honestly, the Europeans imposing this rule on their exchanges, will be good for the US exchanges (in a way). Foreign HFT firms will start playing their games on the US exchanges, bringing more money into the US. However, I am sure that money will leave as quick as it came, and small investors and traders will be screwed over as usual.