A US Commodity Futures Trading Commission committee has outlined a series of proposals to ensure high frequency trading does not harm market integrity.
However, while issuing the suggestions, the committee warned
it would be too expensive to regulate the algorithmic market,
and so was recommending a series of market-driven
In a public hearing on March 1, the
CFTC’s Technology Advisory Committee revealed a
series of pre-trade measures to ward off market crashes like
the one of May 6, 2010 – when HFT firms were widely
viewed as a catalyst for an intraday market crash.
The committee said it aimed to keep
the benefits of electronic trading, but check new risks that
had been created as a result. The five page report highlights
three areas of the electronic trading chain which could be
subject to new requirements: trading firms, clearing firms and
However, instead of proposing a
series of new rules, the committee proposed using a series of
checks by each of those groups to ensure HFT did not harm the
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