High-frequency trading and regulatory policies. A tale of market stability vs. market resilience

Trading à haute fréquence et régulation économique, un arbitrage inéluctable entre stabilité et résilience des marchés financiers

Sandrine Jacob Leal and Mauro Napoletano
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Sandrine Jacob Leal: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur

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Abstract: Over the past decades, high-frequency trading (HFT) has sharply increased in US and European markets. HFT represents a major challenge for regulatory authorities, partly because it encompasses a wide array of trading strategies (AFM (2010); SEC, 2010), and partly because of the big uncertainty yet surrounding the net benefits it has for financial markets (Lattemann and al. (2012); ESMA (2014); Aguilar, 2015). Furthermore, although HFT has been indicated as one potential cause of extreme events like flash crashes, no consensus has yet emerged about the fundamental causes of these extreme events. Some countries' regulations have already accounted for HFT,[1] but, so far, this has led to divergent approaches across markets and regions.

Keywords: Trading à haute fréquence; Marchés financiers; Réglementation économique (search for similar items in EconPapers)
Date: 2018-01-26
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Published in 2018

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Working Paper: High-frequency trading and regulatory policies. A tale of market stability vs. market resilience (2018)
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