Former LSE boss Furse to head UK high-frequency trading probe
09 February 2011 | 9600 views | 0
The UK government has tapped former London Stock Exchange chief Clara Furse to head up a study into the impact of high-frequency trading on market stability and the economy.
Today, over one-third of the UK's equity trading volume is generated through high frequency automated computer trading while in the US this figure is closer to three-quarters.
The practice has come under increasing scrutiny on both sides of the Atlantic, particularly in the wake of May's flash crash in the US, which saw the Dow Jones Average plummet by around 1000 points in minutes.
The role of HFT is a major factor in the European Commission's current overhaul of MiFID and is also being investigated by the Securities and Exchange Commission.
The Foresight project, was set up late last year to explore how computer generated trading in financial markets might evolve in the next ten years, and the challenges and opportunities this will present.
Professor Sir John Beddington, government chief scientific adviser, is the project's director, drawing together a lead expert group which will be headed by Furse, now a non-executive director at Nomura.
"I really welcome the opportunity to chair this important project. The evidence based analysis that it will produce will help us understand how computer trading in financial markets could evolve and impact on financial stability. This is a fundamental issue for the efficiency and integrity of global financial markets and the economies they serve," says the ex-LSE boss.
Other group members include Andy Haldane, executive director, financial stability, Bank of England, Professor Charles Goodhart, Dr Jean-Pierre Zigrand and Professor Oliver Linton from the London School of Economics, Professor Dave Cliff from the University of Bristol, Professor Philip Bond from the Oxford Centre for Industrial and Applied Mathematics and Kevin Houstoun, co-chair, global technical committee, FIX Protocol Limited.