High-Frequency Trading

On December 18, 2020, the European Securities and Markets Authority (ESMA) published a consultation paper to assist the European Commission (Commission) in reviewing and producing a report on the impact of requirements relating to algorithmic trading, including high-frequency trading.
Continue Reading ESMA Publishes Consultation Paper on Impact of Algorithmic Trading

On May 28, the German government introduced an amendment to the German Banking Act regarding the license requirements for “third-country” (i.e., non-European) proprietary trading firms seeking access to, or membership of, German trading venues (the Amendment).
Continue Reading Germany Introduces Limited-Scope Exemption for Non-European Proprietary Trading Firms Trading on German Trading Venues

On April 15, the UK Financial Conduct Authority (FCA) published an occasional paper (Paper) in relation to high-frequency traders (HFT). The Paper reports on a study that was conducted by the FCA to test whether or not HFTs were anticipating order flow on a systemic basis, and focused on two key questions:

(1) Whether HFTs capitalize on latency advantages to anticipate orders arriving in quick succession at different trading venues?

(2) Whether HFTs anticipate orders over longer time periods (seconds or tens of seconds)?
Continue Reading FCA Paper Regarding High-Frequency Traders

On October 20, Carlo di Florio, chief risk officer and head of strategy of the Financial Industry Regulatory Authority, gave a speech at the National Society of Compliance Professionals regarding risk and regulatory issues in the markets and FINRA’s risk-based exam program, Comprehensive Automated Risk Data System (CARDS), the Consolidated Audit Trail (CAT) and FINRA’s efforts to improve transparency.
Continue Reading FINRA Remarks at the National Society of Compliance Professionals Conference

On October 16, in a groundbreaking trading manipulation case, the Securities and Exchange Commission entered an Order instituting a settled administrative proceeding against high-frequency trading firm Athena Capital Research, LLC (Athena). The SEC claimed that from June through December 2009, on almost a daily basis, Athena engaged in a practice called “marking the close,” buying