Boston, MA, May 4, 2009 – A new report from Aite Group, LLC examines the growth of the high frequency trading community, and details its overall impact in the marketplace. Based on trading data and interviews with key market participants the report also reveals that a failure to include the high frequency community in any regulatory dialogue could have a potentially devastating impact on the overall growth of global markets.
In today's highly electronic trading environment, high frequency trading firms play the role of liquidity providers, much like the traditional market-makers and specialists of the past. High frequency trading is a byproduct of market evolution and has taken up the critical role of providing much-needed liquidity to the global financial markets. As new regulations are developed, input from the high frequency trading community is essential to ensure that its role is not diminished.
"Regulators must spend the necessary time and effort ensuring that the interests of the high frequency trading community can be incorporated into any future changes in the marketplace," says Sang Lee, managing partner with Aite Group and author of this report. "Given the level of influence the high frequency trading community currently has in the financial services industry, any regulation developed without their active participation is doomed to fail."
This 21-page Impact Note contains 14 figures and one table. Clients of Aite Group's Institutional Securities & Investments service can download the report.