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FIA comments on Japan's high speed trading proposal

FIA comments on Japan's high speed trading proposal

22 November 2017 2:45pm EST

On Nov. 22, FIA submitted comments to the Financial Services Agency of Japan regarding proposals for the implementation of a new law establishing a regulatory framework for high speed trading on Japanese exchanges. The letter, which was drafted with substantial input from the FIA Principal Traders Group, expressed support for a principles-based approach to the regulation of automated trading and commended the proposal for ensuring that market participants implement pre-trade risk controls and other measures to minimize the likelihood of market disruption and "abnormal" orders. FIA cautioned that the broad scope and definition of high-speed trading in the proposal could capture a wide variety of market participants including trading firms, hedge funds, asset managers and brokers domiciled both domestically in Japan and overseas. Additionally, registration requirements triggered by the use of co-location may create a situation where participants will need to assess whether it is cost-effective to access Japanese financial markets in this manner. FIA also commented on a number of specific provisions, including the requirements to provide descriptions of trading strategies, information about officers and directors, financial information, and annual reports. The full letter is available here

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FIA Letter to FSA - High Speed Trading - ENG - 22Nov17.pdf

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