EU New Regulations on High Frequency Trading

MiFID new regulation

In finalizing the Mifid II directive and Mifir regulation, EU law makers have heeded the calls of some market participants not to impose speed limits, or resting periods, designed to slow down automated trades and prevent large-scale errors.

Provisions that would have required a minimum 500 millisecond pause on incoming trades have been dropped, alleviating some of the concerns about the potential impact on liquidity, and trading shifting to other jurisdictions.

However, participants engaged in high-frequency algorithmic trading will need to be licensed, and trading facilities must limit the ratio of unexecuted orders to transactions in their systems.

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One Response to EU New Regulations on High Frequency Trading

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