FX industry clamps down on high speed traders
by Michelle Price at Financial News
Brokers and foreign exchange trading platforms have launched an industry-wide project that will introduce greater controls on high frequency trading in the FX markets, in a further sign of the growing concern surrounding the controversial trading practice.
The industry initiative, which has been led by the Icap-owned post-trade services company Traiana, introduces new controls that allow prime brokers to centrally monitor and limit algorithmic and high frequency FX trading activity in real time.
The project reflects growing concerns in both the US and Europe regarding the proliferation of high frequency trading activity, which is now spreading from equities across a range of asset classes, including the $4 trillion-a-day global FX market. High-frequency trading accounted for around 30% of all FX flows in 2010, compared with just 13% in 2004, according to Boston-based consulting firm Aite Group.