Europe puts a stop to high-frequency trading. To this end, at the end of a long battle fought with amendments, social democrats and people would have reached an agreement on the measures to adopt for the modification of the Mifid and Mifir directives which will be presented to the European Parliament on Friday.
The proposal, as regards the Hft, is to consider valid only the orders that, once inserted in the system, remain there for at least 500 milliseconds, a measure that would avoid cases like the one that recently occurred of an anonymous trader who, using an unknown algorithm, entered, and then immediately canceled, orders on 500 stocks every 25 milliseconds, moving 4% of Wall Street without leading to terminate any transaction.
An operation of pure and simple speculation, which has made even more evident and urgent the need for the European Union to limit the Hft, which now accounts for 70% of trade in the United States, a percentage that drops to 15% in Italy.
The use of algorithms will also be regulated, which will only be permitted if banks and intermediaries sign a prior agreement with the operator who manages the market, to prevent the algorithms from being used in an improper.
