CFTC, SEC face data deficit in HFT fight


When it comes to the technology used by the banks and the regulators who have to keep them in line, it's not even a fair fight.

This imbalance of data and IT dollars is hampering the regulators as they try to bring some sense of control to high-frequency trading (HFT), the sub-second deal-making that Wall Street loves and Congress hates and fears.

According to the CFTCLaw blog, The U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) have teamed up with FINRA, the financial industry's self-regulating entity, to crack down on HFT. "Yet, barring unforeseen technological changes or a reallocation of resources, it remains to be seen whether 2013 will become the year of HFT regulation," according to the blog.

It notes that, "Reportedly, the SEC will begin streaming real-time trade data into its headquarters this month. The SEC's new technology will reportedly cost $2.5 million in the first year. The adoption of new technology comes on the heels of an announcement by ASIC, the Australian Securities Investment Commission, that it will use high-frequency trading technologies in order to monitor HFTs. Although the technology itself may help the SEC cover a lingering resources gap, it remains to be seen how the data will be used to monitor trading entities. There is also some speculation as to whether the SEC is currently staffed with analysts who can process the data."

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