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Alternative Investment Management Association Representing the global hedge fund industry

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Germany

The German HFT law (“Hochfrequenzhandelsgesetz”) was first adopted by the Federal Government on 26 September 2012. It was voted on by the Finance Committee of the Bundestag (Parliament) on 27 February 2013 and adopted by a plenary sitting of the Bundestag on 28 February 2013. It was subsequently approved by the Bundesrat (Federal Council) on 22 March 2013. The law was published in the German Federal Gazette (the Bundesgestzblatt) on 14 May 2013.

Key features of the HFT law are as follows:

  • an authorisation requirement for firms who undertake high frequency trading on a German regulated market or Multilateral Trading Facility (MTF);
  • a transitional period of 6 months (for domestic firms) or 9 months (for foreign firms) to apply to the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) for authorisation;
  • requirements that trading venues set order-to-trade-ratios (OTTRs) and minimum tick sizes; 
  • a requirement that trading venues put in place flagging systems for algorithmic orders; and
  • organisational requirements for trading firms.

Key legislative documents

Gesetz zur Vermeidung von Gefahren und Missbräuchen im Hochfrequenzhandel (“Hochfrequenzhandelsgesetz”)

BaFin Frequently Asked Questions relating to the High-Frequency Trading Act

Consultations, legislative process and related AIMA documents

AIMA-MFA submission - Interpretation of the German HFT law (May 2013)

AIMA Summary of the German HFT Act (April 2013)

 

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        1. ETFs and Structured UCITS
      5. Venture Capital
      6. Shareholder Rights Directive
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      7. CFTC Automated Trading
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