High-frequency traders in the European Union (EU) are set toface some of the toughest rules in the world, as legislators backedrules that they said would curb volatility and make marketssafer.

The limits include standards meant to keep the price incrementfor securities from being too small, mandatory tests of tradingalgorithms, and requirements that market makers provide liquidityfor a set number of hours each day. The curbs are part of revampedEU markets legislation approved by the European Parliament votingin Strasbourg, France.

The price increment rules and other measures requiring tradingto stop if “price volatility goes beyond a certain level” will slowdown high-frequency trading “to a more manageable pace,” MarkusFerber, the legislator who led the assembly's work on thestandards, said in an email before today's vote.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.