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The Opalesque team:

A survey released in advance of the Trade Tech West conference shows that over half of traders surveyed see high frequency trading (HFT) impacting both market volatility and costs.

The 41% surveyed who favor further regulation of HFT may be happy to hear that SEC Chairman Mary Schapiro said in a letter to Senator Ted Kaufman (Delaware) that the regulatory agency would be reviewing HFT practices as part of an overall inspection of advanced technology use in the markets.

Senator Kaufman expressed concern over market technology issues, including HFT in a letter he sent to Schapiro in late August. Amongst the Senator’s concerns was the growing opinion that increased liquidity, which is one of the arguments in favor of allowing high frequency trading, has grown to be more valuable “than fair execution of trades for all investors.”

Schapiro’s response to Kaufman said the SEC would review HFT as the agency’s “clear responsibility is to uphold the interests of long-term investors.”

High frequency trading would be only one area of investigation for the SEC, as Schapiro’s letter also refers to reviews of co-location and alternative trading system thresholds and flash orders and dark pools.

On September 17th the agency will propose banning flash orders, which the Trade Tech survey also shows is a point of contention amongst traders, as 50% of those surveye......................

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