TREASURY and the Australian Securities & Investments Commission are working on increasing the charges imposed on stock orders to impede the increase in high-frequency trades on the Australian Securities Exchange.
The move won’t come into effect until July next year, but will answer the calls from some leaders in the market for definitive action.
ASIC has a supervision levy that is based on cost recovery, but deputy chair Belinda Gibson confided in an interview yesterday that Treasury and ASIC were looking at “the allocation of the expenses”.
In round terms, high-frequency traders lodge 70 orders per transaction against about 15 for institutional traders and five for retail punters.
If it costs more money to lodge an order, then the HFT traders would lose the incentive to lodge multiple bids just to mine the market for offers and essentially grab orders before they hit the general screens.