We heard lots of talk in 2011 about possible regulation of high-frequency trading and the consequences of possible over-regulation.

Wall Street executives regularly remind folks that some high-frequency trading shops--in the face of onerous new legislation and perhaps a tax on securities transactions--would simply pick up and move overseas. The question is, where would they go?

As things look now, Europe does not loom as an inviting destination as the regulatory chatter across the pond has put forth even more dire regulatory constraint. So that leaves Asia and the developing world. We've noted that big exchanges in Asia, Japan and Singapore for example, are gearing up to handle more high-frequency trading, all but lusting for the business. 

Advanced Trading notes that India's Bombay Stock Exchange has predicted computer based-trading in its $1.5 trillion stock market will double over the next three years. In addition, the Association of South East Asian Nations (ASEAN) is planning to debut the ASEAN Trading Link next year, "which would electronically link exchanges in Thailand, Singapore and Malaysia. Vietnam, the Philippines and Indonesia are also slated to link their exchanges to ASEAN Trading Link in 2012."

In South America, officials in Brazil have big plans to retool the country's markets to handle more high-frequency trading. This is going to happen regardless. As of now, it does not appear that onerous regulations will meaningfully stall the market in the United States. You cannot blame the current lull in volume on regulation. Even so, everyone in the industry sees the need to develop solutions for high-frequency trading in other countries.

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