News

Virtu to Take on Banks as Swap Market-Maker

By Duncan Wood
Published July 24, 2014 Risk

High-frequency-trading firm Virtu Financial has been executing test interest rate swap trades on a broker-run central limit order book (Clob) – one of only two non-banks known to have done so. The company, best known as an equities trader, is preparing to take on incumbent dealers by launching an over-the-counter derivatives market-making business, says president and chief operating officer, Chris Concannon.

"We definitely see this as an opportunity. We view ourselves as a market-maker in a lot of asset classes globally, including rates and fixed income. Just look at interest rate swaps – the two-year swap is fairly liquid, there is a lot of interest in it and it is traded in various major currencies, so it has a lot of the attributes we find attractive," he says.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

European Firms Grapple with Algo-Tagging Rules

By Marina Davis
Published May 30, 2014 Waters Technology

Although the flagging and tagging of algorithms is only currently required in Germany, under the German HFT Act, it is slowly making its way into Pan-European law. Marina Daras looks at the German rule to see how the algo labeling requirement under Mifir and Mifid II is going to impact investment firms and trading venues across Europe.

With the Markets in Financial Instruments Regulation and Directive Level II (Mifir and Mifid II) nearing completion, European authorities are hoping to regulate and control high-speed and high-frequency trading (HFT) once and for all. But new laws come with new challenges, and these latest variations raise concerns around “algo labeling,” where a lot of uncertainties remain.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Mifid II Proposals on Controlling HFT

By Anish Puaar
Published May 29, 2014 Financial News

The second version of Mifid includes measures to control aspects of electronic trading and HFT for the first time.

Below is a summary of what the rules will include.

• The need for all HFT firms to be regulated and licensed

Previously, firms that traded using their own capital were not subject to the Mifid rules. The revised rules mean firms engaging in high-frequency trading will need to adhere to Mifid for the first time.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Lawmakers Back High-Frequency Trade Curbs in EU Markets Law

By Jim Brunsden
Published April 15, 2014 Bloomberg

High-frequency traders in the European Union are set to face some of the toughest rules in the world, after legislators backed rules that they said would curb volatility and make markets safer.

The limits include standards meant to keep the price increment for securities from being too small, mandatory tests of trading algorithms and requirements that market makers provide liquidity for a set number of hours each day. The curbs are part of revamped EU markets legislation approved yesterday by the European Parliament voting in Strasbourg, France.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Chilton Says He’ll Leave U.S. Swaps Overseer Next Week

By Silla Brush
Published March 12, 2014 Bloomberg

Bart Chilton says he’ll leave the U.S. Commodity Futures Trading Commission next week after almost seven years of pushing for limits on oil and natural gas speculation, as well as curbs on algorithmic and high-frequency trading.

Chilton, who said in November that he was planning to leave the derivatives regulator, said in an interview yesterday that he will leave the CFTC by March 22. He said he is writing a book titled “Theft” about the relationship of Wall Street and Washington.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

EU Lawmakers Seal Deal on Financial Market Rules Overhaul

By Jim Brunsden
Published January 15, 2014 Bloomberg

European Union lawmakers clinched a deal to toughen the bloc’s financial-market rulebook, backing sweeping measures that will put the brakes on high-frequency trading and curb speculation in commodity derivatives.

The overhaul, which will push more activity on to regulated platforms, is designed to remedy deficiencies laid bare in the 2008 financial crisis. The accord ends more than two years of haggling over proposals from Michel Barnier, the EU’s financial services chief.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

CME Group Sparked Shutdown of CFTC's Academic Research Program

By Sarah N. Lynch
Published April 24, 2013 Reuters

The world's largest futures exchange has accused the top U.S. derivatives regulator of illegally sharing sensitive market data with outside researchers who then used the information to publish academic papers about high-frequency trading.

A December 14, 2012 letter from CME Group Inc prompted the Commodity Futures Trading Commission (CFTC) to launch an internal probe into its research program for visiting academics, and temporarily shut it down.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

German HFT Law Licencing Issue Could Spark Liquidity Rush

By Richard Henderson
Published April 10, 2013 The Trade

Liquidity in derivatives instruments on Deutsche Börse's Eurex platform could shift to competitors NYSE Liffe and Nasdaq's new NLX venue as a new German law requires high-frequency trading (HFT) firms to register with national regulator BaFin.

Currently, 'passport' rules under MiFID allows firms supervised by domestic regulators to operate in other European markets - for instance a UK-based firm trading in Germany – although this may be limited by differences in domestic supervision categories. Many high-frequency trading (HFT) firms are regulated only as 'local entities' and may not be eligible for the passport option.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Swap Regulations Hold Key to Future of OTC Algorithmic Trading

By Peter Madigan
Published March 25, 2013 Risk

The growth of algorithmic and high-frequency trading (HFT) in the past decade has been accompanied by a rising tide of anger and fear, which reached its high-water mark in the months following the so-called flash crash in US equity markets on May 6, 2010. In theory, algorithms provide greater efficiency to end-users, by linking fragmented trading venues, bolstering liquidity and delivering better prices. In practice, critics claim that when the algos are deployed by HFT firms, the opposite is true.

This debate is in its early days for the over-the-counter derivatives market but, so far, it is following a well-trodden path.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

All Eyes on Italy's High-Frequency Rules

By Philip Stafford
Published February 19, 2013 Financial Times

Italy is set to become a testing ground for the regulation of high-frequency trading as politicians wrestle with the contentious topic.

Over Christmas, Italy introduced a financial transactions tax that went further than a French equivalent last August. Specific legislation was aimed at high-frequency trading in local equities and derivatives – asset classes that have attracted high-frequency traders because they are liquid and traded on exchanges.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

MEPs Set Date for MiFID II Sign Off

By Richard Henderson
Published October 16, 2012 The Trade

MEPs will vote on the European Parliament’s version of MiFID II on 26 October, with broad support expected on key issues including broker crossing networks and high-frequency trading (HFT).

The plenary vote requires all MEPs to vote on the version of MiFID II agreed on by the European Parliament’s Economic and Monetary Affairs Committee (ECON).

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

HFT Curbs Could Damage Growth, Study Says

By Phillip Stafford
Published August 30, 2012 Financial Times

European proposals aimed at curbing automated trading could have a negative economic impact on the region, according to a study commissioned by the British government.

The findings are part of a high-profile project begun last year to examine the effects of computerised trading, including high-frequency trading, on financial markets.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

High-Frequency Trading Has Made Markets More Efficient

By Scott Patterson
Published June 27, 2012 Wall Street Journal

Few developments in the financial markets in recent years have inspired as much debate—oftentimes rancorous—as the rise high-frequency trading, the use of supercomputers by sophisticated trading outfits to jump rapidly in and out of markets.

full article describe the image (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

CFTC Moves to Brake High-Speed Traders

By Scott Patterson and Jenny Strasburg
Published June 19 2012 Wall Street Journal

U.S. regulators are about to take a big step toward reining in high-frequency trading: defining what it is. On Wednesday, a Commodity Futures Trading Commission subcommittee is expected to propose a roughly 60-word definition of high-frequency trading that would define it broadly, a bad sign for traders who had hoped for narrower language.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

On the Hunt for Flash-Crashing Cheetahs

By Jim McTague
Published May 26 2012 Barron's

Bart Chilton can hardly claim to be a voice crying in the wilderness, yet he has every reason to feel like one.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

An FDA for Derivatives Could Prevent Future Crises

By Eric Posner and Glen Weyl
Published April 2 2012 Bloomberg

In February, Mary Schapiro, chairman of the Securities and Exchange Commission, said the agency is looking for ways to rein in high-frequency traders. That is, the people who use computer algorithms to buy and sell derivatives at lightning speed to make instantaneous profits.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

Gensler: Regulators Can’t Assume Algos Are Designed Well

By Tom Steinert-Threlkeld
Published March 29 2012 Securities Technology Monitor

The main regulator of futures markets is considering putting out a concept release that would seek comment on how to test and supervise the use of algorithms in high-speed automated markets.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

UK says Tobin Tax Won't Make Markets Safer

By Huw Jones
Published January 31 2012 Reuters

Taxing ultra fast trading, as France pledged to do this week, would encourage business to move elsewhere and not make markets stabler, Britain said on Tuesday.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

CFTC Weighs New Rules for Derivatives Trading

By Silla Brush
Published January 30 2012 Bloomberg

The U.S. Commodity Futures Trading Commission, which is working to complete Dodd-Frank Act rules for derivatives markets, is weighing new rules and oversight of companies that use automated and high-frequency trading systems.

full article describe the image (free)

SocialTwist Tell-a-Friend Related Posts with Thumbnails

High-speed Trading Rules Loom

By Phillip Stafford
Published December 22 2011 Financial Times 

Exchanges and brokers must take the lead in policing high-frequency trading (HFT), according to the pan-European markets regulator, which has given market participants slightly more than four months to comply with guidelines on computerised trading.

full article describe the image  (subscription)

SocialTwist Tell-a-Friend Related Posts with Thumbnails