How to Regulate HFT’s Secrets

May 29, 2014

Steve Lofchie comments in IFLR magazine about claims that the speed at which high-frequency trading (HFT) can digest what happens on one exchange and react on another by buying or selling at a different price can lead to market distortion and front-running:

"The question isn't whether we have too much competition," says Steven Lofchie, partner at Cadwalader Wickersham & Taft in New York. Instead, Lofchie asks whether the situation is a result of market forces where exchanges are seeking to beat their competitors with a better product. "Or is it the result of the SEC establishing a structure that pays exchanges for sharing market data and forces market participants to look at the bids and offers on every exchange and give them priority even if they have a very limited space in the market?"

CadwaladerSpotlight

Join nearly 500 leaders from the financial services, investment management and legal communities for an afternoon of panels covering key trends in the commercial real estate, fund finance, debt fund, structured products and loan markets.