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February 11, 2014

High-speed traders mount defense as CFTC studies sector

“High-speed traders defended the merits of their business on Monday as the U.S. futures regulator kicked off a new round of scrutiny for the sector often blamed for market disruptions.

“Traders spoke out as a Commodity Futures Trading Commission (CFTC) committee held its first meeting on automated and high-frequency trading (HFT) since issuing a long-awaited report on the practices last fall.

“Citing a series of trading glitches as evidence that its rules needed updating, the CFTC had asked for industry input on a long list of possible regulations to make trading safer.

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“It is important for the CFTC to assess a number of potential regulatory changes in light of the high-speed trading environment, including its definitions of banned practices like front running, said Caitlin Kline, derivatives specialist for Better Markets, a group that says it fights for the public interest in financial markets.

“High-frequency traders are “effectively are able to see the future” when they digest information faster that other investors, she said.”

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Read full Reuters article here

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