High frequency trading (HFT)
‘Dark trading’ approach shows UK regulators are more ‘nimble’ – FCA
UK regulator has not seen evidence that dark trading harms market participants
Brainard: Fed keeping open mind on AI regulation
Some rules already apply to AI tools, but Fed “still learning” about AI’s impact
Central banks adapting to high-speed markets, BIS report finds
“Major developments” in markets are affecting the way central banks operate, Markets Committee says
Kuroda says controls on high-frequency trading ‘critical’
HFT can aid market efficiency, but action is needed to tackle its downside, says BoJ governor
Imperfect algorithms impact market pricing – Fed paper
News-parsing algorithms create temporary distortions and may cut liquidity, paper finds
‘Black box’ models present challenges – US regulators
US officials say they have some powers to assess AI tools, but resourcing is problematic
Latin American markets were hit by 2010 US ‘flash crash’, DNB paper finds
Fall was driven by equities markets’ interdependence, not contagion, researcher argues
Algo trading harmed market during Swiss franc crash – paper
Algorithmic traders tended to “consume liquidity and reinforce the price disruption”
UK regulators unveil rules for algo trading
PRA and FCA outline their approaches to supervising the ultra-fast trading methods
Riksbank paper finds ‘significant’ gains from faster trading
Faster trading systems have eliminated arbitrage opportunities, improving market efficiency and quality, authors say
ECB paper models causes of flash crashes
Informational asymmetry and thin participation can cause liquidity problems, paper argues
FCA paper investigates whether HFTs predict orders
Working paper finds patterns consistent with HFTs anticipating order flows over longer time periods, but authors unable to ascertain cause
Carney says supervisors must improve understanding of electronic trading
BoE officials say work is progressing on understanding the risks and impact on ‘system dynamics’ caused by rise of electronic trading, but emphasise it is not all bad
Regulators need better grasp of electronic trading, BIS committee says
Rapid growth of electronic trading in fixed-income markets demands more sophisticated regulatory analysis, Markets Committee says; new risks may be developing
NBIM report urges stock exchanges to prepare for next phase of development
Technological and regulatory changes have led to faster, more fragmented markets, and stock exchanges need to adapt if they are to keep up; latency race to zero is a ‘dead end’, says fund
FX regulator probes AUD spike prior to policy announcement
Australia's authorities look into sudden moves in the Australian dollar's value ahead of RBA monetary policy announcements
BoE research finds high-frequency trading makes prices more efficient
High-frequency trading, although correlated, appears to be based on information and therefore helps markets form prices efficiently, working paper finds
Time for clock synchronisation – regulators
Global regulators assess the need for a central reference clock to aid investigations into alleged abuse of financial markets
ECB paper finds value in high-frequency trading
Working paper suggests high-frequency trading aids price discovery, such that regulatory restrictions could damage market efficiency