Global Algorithmic Capital Markets

2018 ◽  
Keyword(s):  
Public Policy ◽  
Capital Markets ◽  
Systemic Risk ◽  
High Frequency ◽  
Investor Protection ◽  
High Frequency Trading ◽  
Market Making ◽  
Market Governance ◽  
Policy Objectives ◽  
The Impact

This book illustrates and assesses the dramatic recent transformations in capital markets worldwide and the impact of those transformations. ‘Market making’ by humans in centralized markets has been replaced by supercomputers and algorithmic high frequency trading operating in often highly fragmented markets. How do recent market changes impact on core public policy objectives such as investor protection, reduction of systemic risk, fairness, efficiency, and transparency in markets? The operation and health of capital markets affect all of us and have profound implications for equality and justice in society. This unique set of chapters by leading scholars, industry insiders, and regulators sheds light on these and related questions and discusses ways to strengthen market governance for the benefit of society at large.

Introduction and Overview

2018 ◽  
pp. 1-6
Author(s):  
Walter Mattli
Keyword(s):  
Public Policy ◽  
Capital Markets ◽  
Systemic Risk ◽  
High Speed ◽  
Investor Protection ◽  
First Century ◽  
Market Making ◽  
Global Capital ◽  
Policy Objectives ◽  
Twenty First Century

A key component of the infrastructure of global capital markets—exchanges—has undergone dramatic transformations since the start of the twenty-first century. Two are particularly notable. First, traditional floor trading and ‘market-making’ by humans have been replaced by supercomputer interactions and algorithmic high-speed trading. And, second, previously centralized domestic exchange structures have become decentralized or fragmented, with many exchanges and alternative trading platforms competing for business. This chapter introduces a unique set of chapters by leading scholars, industry insiders, and regulators shedding light on how these changes have impacted on core public policy objectives such as investor protection, reduction of systemic risk, fairness, efficiency, and transparency in markets for the benefit of society at large.

A Framework for Responsive Market Regulation

2018 ◽  
pp. 332-358
Author(s):  
Timothy Baikie ◽  
Tracey Stern ◽  
Susan Greenglass ◽  
Maureen Jensen
Keyword(s):  
Capital Markets ◽  
High Frequency ◽  
High Frequency Trading ◽  
Market Regulation ◽  
Business Decisions ◽  
Regulatory Climate ◽  
Recent Developments ◽  
The Impact ◽  
Regulatory Landscape

This chapter submits that a regulator’s raison d’être is not simply to react to market issues but to be proactive and to follow and to understand the changes and the business decisions in the market. Regulators must be able to change and foster a responsive regulatory climate that allows innovation to occur, while ensuring that core principles such as investor protection are preserved and that the impact of any change is monitored. To that end, the chapter highlights the role of the Ontario Securities Commission in the Canadian regulatory landscape, and details how it has addressed the multitude of challenges posed by recent developments in Canadian capital markets, including the growth in dark liquidity and the emergence of high frequency trading.

The Impact of High-Frequency Trading in Experimental Markets

2020 ◽  
Vol 29 (4) ◽  
pp. 7-18
Author(s):  
Nathanael Berger ◽  
Mark DeSantis ◽  
David Porter
Keyword(s):  
High Frequency ◽  
High Frequency Trading ◽  
Experimental Markets ◽  
The Impact

scholarly journals The Impact of High-Frequency Trading on Markets

CFA Magazine ◽  
2011 ◽  
Vol 22 (2) ◽  
pp. 10-11 ◽  
Author(s):  
Frank Zhang ◽  
Stuart Baden Powell
Keyword(s):  
High Frequency ◽  
High Frequency Trading ◽  
The Impact

High Frequency Trading and Circuit Breakers in the EU

2018 ◽  
pp. 308-331
Author(s):  
Steffen Kern ◽  
Giuseppe Loiacono
Keyword(s):  
High Frequency ◽  
Financial Stability ◽  
Investor Protection ◽  
Legal Framework ◽  
Regulatory Framework ◽  
High Frequency Trading ◽  
Circuit Breakers ◽  
Market Order ◽  
Securities Trading ◽  
The Eu

This chapter reviews the fundamental workings of the EU regulatory framework and its implications for high frequency trading (HFT) and the latest findings on the market realities in the EU. Over the last decade, securities trading landscapes have undergone significant change, with the emergence of HFT being one of the most important developments in this context. At the same time, the EU has made landmark legislative advances with the aim of increasing investor protection, market order, and financial stability, and of containing risks in those areas. As the new MiFID2 legal framework takes effect, a wealth of new data and evidence will become available in coming years that will improve understanding of HFT patterns, the effectiveness of circuit breakers, and their optimal calibration.

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