ASIC claim HFT not cause for concern in Australia
The Australian Securities and Investments Commission (ASIC) has rebuffed any suggestions that high frequency trading (HFT) is a problem within the local stock market and stated that its ‘lack of hysteria' should not be mistaken for complacency.
ASIC also stated that recent news reports in the Unites States claiming that HFT was being used to manipulate US exchanges were not comparable with the situation in the Australian market, as the two were regulated in different ways.
The comments follow the recent publication of a book in the United States which claims that firms employing HFT were able to leap ahead of other investors and have billions of dollars exploiting time differences in stock trades.
ASIC said there were no parallels between these claims and the Australian market and "any suggestion that high-frequency trading is pervasive in Australia is simply not supported by the evidence".
In its statement on HFT, ASIC said that the Australian market had a much smaller proportion of the market that conducted HFT and that ASIC had put in place a number of restrictions on the activity that restrained its growth.
"While some local media commentators have suggested that ASIC is doing little in regard to HFT, the truth is in fact quite different," the regulator said.
"ASIC's lack of hysteria regarding high-frequency trading should not be mistaken for complacency."
The regulator stated it had established a taskforce in 2012 to examine HFT, and since then had taken appropriate action when required, introduced a new market surveillance system and made changes to the regulatory framework relating to securities trading.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
