Securities watchdogs to step up HFT surveillance

Securities watchdogs to step up HFT surveillance

Global securities regulators have called for stronger oversight of high frequency and algorithmic trading activity to 'mitigate the risks' posed by high-speed trading on market integrity and efficiency.

Responding to advances by G20 world leaders, the International Organisation of Securities Commissions (Iosco) has published its final report into the impact of technological change on global financial markets.

Many of the recommendations suggested by the watchdog - such as the introduction of trading halts, volatility interruptions, limit-up-limit-down controls, and direct market access oversight - have already been set in train by national regulators.

Iosco has stopped short of imposing further curbs on high frequency trading, arguing that their is little evidence that the practice impinges upon efficient price discovery or propagates widespread abuses.

Instead, the watchdog is to engage in a further round of inquisition into the adequacy of market data reporting, surveillance and audit mechanisms alongside the use of unique legal identifiers.

Iosco says it will report back on its findings in mid-2012.

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