MFA Urges Against High-Frequency Trading Restrictions

Sep 15 2010 | 2:45am ET

The U.S. hedge fund lobby has weighed in against new rules that would impose market-maker requirements on high-frequency traders.

The Managed Funds Association warned that the proposal to force computerized traders and others with the “best access” to markets to trade during periods of market volatility would have the opposite effect to that intended: making markets more liquid. Some have suggested that high-frequency traders made May 6’s market plunge worse by pulling out of the markets.

“We respectfully urge that you proceed cautiously and introduce changes that are supported by empirical data,” Stuart Kaswell, general counsel of the MFA, wrote to the Securities and Exchange Commission and Commodity Futures Trading Commission. “Changes not supported by empirical data and directed at preventing rare market dislocations, could further harm investors.”

The group also warned the SEC against new rules designed to prevent high-frequency traders from manipulating the markets.

“Proposals to expand the use of speed bumps, delay trading or set maximum execution speeds would cause greater harm to investors by increasing trading and execution costs,” Kaswell wrote.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.