I am starting this topic to discuss the proposed rules on Automated Trading by the CFTC and how they may impact the Collective2 community of system traders.
Here is the link to the CFTC announcement: http://www.cftc.gov/PressRoom/PressReleases/pr7283-15
IMHO no impact as it requires exchange membership and significant market share.
Both factors that exclude Retail.
“The proposed registration requirement would be applicable specifically
to proprietary traders engaged in algorithmic trading through direct
electronic access to a DCM.”
Looks like a long overdue crackdown on High Frequency Trading.
The big HFT firms have without exception all of the proposed rules implemented. Some, i.e. self trade prevention, are exchange and regulator requirements. I don’t think it will cause paradigm change.
BTW: I very much welcome this thread. One of the few, forward looking, intelligent posts in this forum @JF2 well done
There shouldn’t be any “big HFT firms.” The idea that an entire industry came into existence on the front running of retail is abhorrent.
The reality looks a bit different than Flashboys. HFT firms have to guarantee best execution and price improvements for the darkpool orderflow hence I doubt that this has an adverse impact on retail clients portfolio balance.
Beside most HFT are market makers these days, that is providing liquidity on exchange and for that purpose you do have to be as fast as your competitors.
Yes they are great to provide liquidity … for few seconds… And especially great to cause flash crash in the markets. (See MAY 2010 for instance) BTW since it has not been mentioned, there is a hope for traders that does not have millions to invest in tech infrastructure and is called IEX ; HFT firms are resolutely opposed to such a deployment and are currently campaigning against it.