Traders warn Germany on HFT licensing

german-flag-640According to Financial Times’ James Wilson and Gerrit Wiesmann, Germany’s exchange operators and Europe’s high-frequency traders have warned of the risk of an “own goal” for the country’s financial sector if lawmakers press ahead with plans to force ultra-fast computer-driven traders to seek authorisation to operate.

A proposal to licence financial market participants is a centrepiece of German plans for tighter regulation of high-frequency trading, or HFT – the use by automated traders of computer algorithms to generate trades in tiny fractions of seconds

Chancellor Angela Merkel’s government is moving unilaterally to place tighter curbs on HFT in advance of a pan-European overhaul of regulation, which is expected to take at least two more years. HFT has been blamed by some for bringing more instability to financial markets, and their role has been more closely examined by authorites globally after a series of high-profile incidents, such as the “flash crash” in the US in 2010.

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One Response to Traders warn Germany on HFT licensing

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