High Frequency Trading Regulation - White Paper - SIFMA - Impact of High Frequency Trading and Considerations for Regulatory Change, December 13, 2011

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December 13, 2011

The SIFMA white paper highlights some of the regulatory measures that have been put into place or are currently being considered, as well as other areas that warrant further study and possible regulatory action. Those areas include:

  • Limits on excessive market data traffic;
  • Ensuring market data quality;
  • Maker-taker pricing/rebates and access fees;
  • Market maker incentives and obligations; and
  • Additional empirical studies in areas such as micro-level volatility and the identification of certain HFT behavior that may exacerbate market volatility.

The white paper also points out certain proposals that have been suggested by regulators that may have unintended negative consequences, such as:

  • Transaction taxes;
  • the banning of high-frequency trading or other forms of computer-based trading;
  • imposing artificial limits on technological advances; and
  • a "trade at" rule.

The entire report, along with an executive summary, is embedded below.

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