EXCHANGE NEWSWIRE, 18 September 2012
CFTC is investigating the cause of a rapid plunge in the oil prices on Monday afternoon, and is “in contact with CME and ICE”, according to Reuters. Commissioner Scott O’Malia also stated that it was unclear if HFT played a role in the plunge. ICE declined to comment, while CME said it was unaware that any technical issues may have led to the rapid decline in oil prices.
CME said it will not cancel any trades made during the 30 minutes on Monday afternoon during which oil prices plunged around $4 per barrel, Reuters reported.
LSE launched a tri-party collateral management offering, “X-Com” at its Italian settlement house Monte Titoli. The service could include facilitating of securities lending, repurchase agreements, or the management of margin posted by banks to CCPs. Monte Titoli will also act as the custodian of the assets for the transaction’s lifetime, the Financial News reported.
ASX CEO Elmer Funke Kupper said that some economic models that encouraged HFT are “inherently dangerous”, the Financial Times reported. Kupper said that “Australia is in a better place than many countries, particularly the US, in that we don’t have maker-taker pricing. In the US, high-frequency traders get paid to post prices.” He also said that “we don’t have it in Australia today and don’t think we should do there.”
ASX’s dark pool, Centre Point, reported record trading in August, with AUD 2.7b in shares traded, equivalent to around 3% of cash equity turnover in August, according to Bloomberg.
Chicago Fed advocated more stringent controls on high frequency trading, Finextra reported. The agency called for regulators to limit the number of orders that can be sent to an exchange within a specified period of time; intraday position limits; profit and loss limits and a ‘kill switch’ that could stop trading at one or more levels. The Chicago fed studied the trade cycle of 30 firms and found that some of them do not have stringent processes for the development, testing, and deployment of code.
ESMA published draft short-selling rules which clarify the scope of exemptions for market making activities, and call for input on new regulations to be made before October 5, the Trade News reported. The new regulations will require those involved in short selling to publicly list net short positions of more than 0.5% of a company’s stock, and notify the authorities before short selling 0.2% to 0.5% of a company’s stock available on the market.