AIMA

High Frequency Trading

The issue of high frequency trading (HFT) has recently been the subject of increased global regulatory attention.  Legislators and regulators have also examined the larger issue of computer or algorithmic trading as part of their ongoing work to strengthen market structures and the manner in which trading is conducted.

In the USA, the CFTC has recently been considering a possible definition of HFT while, in the EU, the European Commission proposals in respect of the MiFID review contain a number of provisions which would put restrictions on algorithmic trading as a whole, of which HFT is generally seen as a subset.  Further, in the context of MAD, the European Commission’s proposals would label a number of practices said to be linked to HFT as being specifically abusive.

Both ESMA and IOSCO have consulted on guidelines around the issue of HFT. 

• ESMA Guidelines
• MiFID / MiFIR
• MAD / MAR
• Flash Crash
• IOSCO