According to Bloomberg, European Parliament lawmakers have reached a draft deal with national governments on high-frequency trading curbs as part of a push to toughen the bloc’s financial market rulebook, said the chief legislator working on the plans.
“The negotiation team achieved a significant breakthrough on this issue,” Markus Ferber, the lawmaker leading the measures, said in an e-mail. “The area of high-frequency trading is lacking suitable regulation. This is why it was high time to find a decent solution to this pressing problem.”
The provisional deal, reached by legislators and officials from Lithuania, which holds the EU’s rotating presidency, includes a so-called tick size regime limiting the minimum size of price movements on financial markets, Ferber said. “This will slow down high-frequency trading significantly,” he said.
High-frequency trading in stocks came under increased regulatory scrutiny after the so-called flash crash in May 2010, during which the Dow Jones Industrial Average briefly lost almost 1,000 points.