High-frequency trading has become a darling of capital markets debate. This debate thrives because the true and long-lasting effects of high-frequency trading are still unknown. On one hand, high-frequency trading evidences recent and powerful advances in trading technology; on the other, it is said to harness speed at the expense of fairness, prudence, and stability. In part because of this duality, the regulation of high-frequency trading in the United States has been slow to develop. Other nations, however, have been quicker to react and to promulgate laws that directly, or indirectly, affect high-frequency trading. This Note explores the legal responses to high-frequency trading across a multitude of nations. Drawing on insights from this global landscape, it proposes domestic structural reforms—such as a variable tick size regime, discrete call markets, and experimental order taxes— that would allow the positive potential of high-frequency trading to be realized, while minimizing its impact upon market stability.
Lindsey C. Crump,
Regulating to Achieve Stability in the Domain of High-Frequency Trading,
Mich. Telecomm. & Tech. L. Rev.
Available at: https://repository.law.umich.edu/mttlr/vol22/iss1/8