Germany Moves to Regulate High-Frequency Trading

Reuters/Brendan McDermid

Members of Germany’s parliament and representatives of the finance ministry have agreed on the key points for regulating high-frequency trading on German stock exchanges, participants in the discussions told Reuters on Thursday.

The regulation is likely to stipulate that high-frequency traders must have prior authorisation but is unlikely to make a minimum holding period for orders mandatory, the participants said.

“We expect to have a draft law in the second half of the year,” a participant in the discussions said.

High-frequency traders plug algorithms into computers to generate numerous, lightning-speed automatic trades that are designed to make money from arbitrage on razor-thin price differences and movements.

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