Industry Updates

High frequency trading rules in Germany - comments by Eurex and Simmons & Simmons

Friday, August 24, 2012

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Opalesque Industry Update: "You could almost have the impression high-frequency trading has become a public enemy, not just in Germany but also in France and other European countries. As a result, in Germany and beyond the concept of “slowing down the market” has become very popular," said Dr. Randolf Roth, Head of Market Structure, Eurex, in our recent Opalesque Frankfurt Roundtable.

Skynet is a fictional, self-aware artificial intelligence system which features centrally in the Terminator films and serves as the main antagonist of Arnold Schwarzenegger. Skynet's operations are almost exclusively performed by war-machines and other computer systems, with its ultimate goal the extinction of the human race. This picture or something similar might be crossing the minds of many people hearing about high frequency or, more generally, algorithmic trading. Join us for a breakfast briefing session on German developments regarding high frequency and algorithmic trading.

Date: Tuesday 11 September 2012

Time: 08:30 – 08:45 registration 08:45 - 09:45 sessionTime:

Location: CityPoint, One Ropemaker Street, London EC2Y 9SS

The strategy behind Skynet's creation in the film was to remove the possibility of human error and slow reaction time to guarantee a fast, efficient response to enemy attack. Although the avoidance of human error and the reduction of reaction time (latency) are two of the main reasons for the surge in high frequency trading ("HFT"), this is where the similarity to the film ends. HFT traders try to make use of market inefficiencies and arbitrage opportunities and do not fight any enemies.

The fear of algorithms getting out of control and damaging legitimate markets, rather than the fear of a nuclear war, was probably the reason behind the German government's latest legislative proposal aiming to curb HFT and algorithmic trading. The draft "act for the prevention of risks and the abuse of high frequency trading", published almost to the day 15 years after Skynet's awakening, targets specific risks identified by the government in connection with HFT at German trading venues.

During this session we will discuss, together with Dr. Randolf Roth, Executive Director Market Structure, Eurex Frankfurt AG the details of this proposal, its immediate effects in and outside Germany, how the draft compares to proposed legislation at EU level and whether it will be able to de-activate the T-1000.

Your presenters will be Dr. Randolf Roth from Eurex Germany, Jochen Kindermann and Robert Koller from Simmons & Simmons.

If you have a colleague who is interested in attending please contact Nancy Evans at Simmons & Simmons.

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