Over the past 10 years, trading in the U.S. securities markets
has dramatically changed from primarily manual trading to almost
predominately computer-based trading. New regulations – such as
Regulation ATS, decimalization requirements and Regulation NMS –
fostered comprehensive computer linkages among trading venues and
concomitant upgrades to market participants’ trading systems.
Technological advances – such as high speed computing and co-located
servers, increased bandwidth, and electronic messaging standards – have
accelerated the adoption of new electronic trading strategies, tools,
and behavior.
Recent concerns raised in connection with the operation of today’s
markets have been focused on computer-based trading activities and
strategies that generically have been referred to as “high-frequency
trading” (HFT). SIFMA shares its views on computer-based trading,
including HFT. Among other points in this paper, SIFMA seeks to describe
the benefits electronic markets and computer-based trading provide to
investors, and also specific activities and behaviors that may warrant
additional regulatory consideration.
