SGX should consult public on HFT
THERE is a sense of painful resignation, infused with no small amount of frustration and even impending doom among retail players and their brokers following news that the Singapore Exchange (SGX) is pressing ahead with plans to introduce high-frequency trading (HFT) to the local equities market. Since it appears to be a question of when and not if, the exchange should address the myriad issues before opening its doors to a mode of trading that is controversial and has yet to prove beneficial to markets as a whole.
The first thing that the SGX and the Monetary Authority of Singapore should note is the absence of a proper understanding of how exactly HFT works, the activity being so complicated that very few individuals can properly claim to have full understanding or to be experts.
If anything, the fragmentary knowledge that can be gleaned from surfing the Internet or from anecdotal testimony of traders has probably created more confusion than clarity.
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