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HFT defined NOW and regulated in Europe

(Last Updated On: June 25, 2015)

 

HFT defined NOW and regulated in Europe

I am sure this will set new standards for rest of the world

HFT defined:

Before introducing regulations over HFT, the text needs to define what exactly comes under the gambit of HFT. High Frequency Trading is described as either:

  • Submission of at least 4 messages per second with respect to all instruments traded on a trading venue OR
  • Submission of at least 2 message per second with respect to any single instrument traded on a trading venue

    Implications for traders

    • Authorization required: A firm engaging in a High Frequency Algorithmic Trading (HFAT) techniquewill have to become authorised to continue to trade using a HFAT technique.
    • Store historical data: HFAT investment firms will be required to store time sequenced records of their algorithmic trading systems and trading algorithms for at least five years.
    • Market Making: HFT firms who use market making strategies on trading venues will be required to enter into market making agreements with the venues. This design ensures that they provide liquidity on a consistent basis.
  • http://www.quantinsti.com/blog/mifid-ii/

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