Call to regulate HFT dark pool venues in Australia
Regulators turning a keen eye on so-called Dark Pools and high-frequency trading are not just raising their concern in the United States and Europe. The concern for high-spepd trading and unlit venues are being raised in Australia, too.
According to media reports, retail fund managers have called for high-frequency traders and operators of off-market (Dark Pools) venues to be brought under regulatory scrutiny to avoid weakening market structure.
As The Australian reports:
The Financial Services Council also wants the Australian Securities & Investments Commission to impose a tax on order messages -- rather than just on trades -- by high-frequency traders to cover an expected $40 million increase in its costs of regulating the market over the next four years.
But it warned the fee should only be set to cover ASIC's rising costs in monitoring the increased number of order messages that resulted from HFT orders.
This is more than just lip service. Like Canada, Australia's tight regulatory controls and sober risk protocols allowed its firms to avoid much of the damage of the mortgage and credit crises of 2008. If Australian banks and investment firms are to stay on the right side of regulators - and clients - this issue will not fade away.
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