EXCHANGE NEWSWIRE, October 23, 2012
HFT “could be beneficial” for financial markets, according to a UK government report generated in the International Foresight Project. According to CNBC, the report “found that some of the commonly held negative perceptions surrounding HFT are not supported by the available evidence, and indeed, that HFT may have modestly improved the functioning of markets in some aspects.” The report did state that “policy makers are justified in being concerned about the possible effects of HFT on instability in financial markets.”
NYX CEO Duncan Niederauer advocated a wholesale review of US market structure, and that “we can’t go 60 or 90 days without a major fiasco, which shows that the market has become too complex, even for institutions.” According to the Financial News, Niederauer stated that markets are not fulfilling their function to provide funds and allocating capital, and that it is now too easy for shares to be traded away from public stock markets.
Italy’s financial transactions tax may result in a 30% drop in shares trading and a 80% fall in derivatives trades, a bill that will go before parliament stated. The bill estimates that tax proceeds will be EUR 1.09b a year, with a 0.05 tax rate for share and derivatives transactions, with the estimate based on a forecast of “possible reductions in the volume of transactions,” Reuters reported.
Argentina’s government announced it plans to draft a project for a new capital markets law. The Government may give more responsibilities to the National Securities Commission (CNV) to oversee areas that have been until now under the radar of self regulatory organizations. It may also seek to demutualize markets and promote consolidation of spot and derivatives exchanges into a single integrated exchange, according to local newspaper Ambito Financiero.
Marex’s former derivative trader Alex Kinsman will set up his own algorithmic trading firm called “eHawk Partners”. The firm will trade FX and index-based products using algorithmic trading strategies, according to the Financial News.
SEC adopted new risk management rules under the Dodd Frank Act, which will require standard swap contracts to be routed through clearinghouses. SEC Chairman Mary Schapiro was quoted in Reuters saying that “these new rules are designed to ensure that clearing agencies will be able to fulfill their responsibilities in the multitrillion-dollar derivatives market as well as more traditional securities markets.”
USDA defended its practice of providing reporters earlier access to crop data, and stated that the policy was fine “because reporters cannot publish information from crop reports until they are available to the general public.” USDA World Agricultural Outlook Board Chairman, Gerald Bange, said that reporters “help us disseminate the information” and “to our knowledge, nobody is pre-releasing anything from lock-up, Reuters reported.