Australian regulators should consider banning high-frequency trading in the equities market, according to Industry Super Network, which represents the $1.3 trillion pension funds industry.
High-frequency trading, in which computer algorithms are used to buy and sell stocks in fractions of a second, can exacerbate slumps in the stock market and undermine investor confidence, the organisation said on its website. ISN represents Australian pension funds that have about 5 million individual members, according to its website.
Strategies that use computer algorithms to buy and sell shares are being scrutinised globally amid concern that they can destabilise markets and make them less equitable. The Australian Securities & Investment Commission is considering altering rules on market structure, which include regulations on algorithms and high-frequency trading. Submissions for the consultation to ASIC closed on Friday and proposals are expected next month.