The Australian Securities and Investment Commission (Asic) has hit out at media criticism of its apparently laissez-faire approach to high frequency trading and the 'hysteria' which has gripped the markets following the publication of Michael Lewis' damning expose of 'Flash Boy' traders.
Actually ASIC did implement dark pool rules, but decided that HFT was not in itself an issue.
It is the front-running of trades that are bounced between venues that is the problem identified in Flash Boys, which relates specifically to latency arbitrage HFT, not all HFT. Therefore restricting the routing of trades to alternative venues, increasing their
transparency around order flow and addressing conflicts of interest would seem a perfectly rational strategy.
See http://asiaetrading.com/asia-etrader-magazine/asia-etrader-magazine-issue-eight/ for details.
© Finextra Research 2015