NYSE: No need to restrict high frequency trades

October 14, 2009

    WASHINGTON, Oct 13 (Reuters) – The head of the New York Stock Exchange said on Tuesday that it was not necessary to bring more oversight to high frequency trading, a split-second stock trading strategy that has come under regulatory scrutiny.
   The U.S. Securities and Exchange Commission has said it is reviewing high frequency trades and other elements of the electronic marketplace such as co-location, which allows trading firms to shave microseconds off trading times.
   “I frankly hope” the SEC does not do much, said Duncan Niederauer, the chief executive of the New York Stock Exchange parent NYSE Euronext <NYX.N>.
   “I am certainly not under the impression that there is anything nefarious going on … If there isn’t, I am not sure why it is getting so much attention,” Niederauer told reporters.
   Some lawmakers are pressuring the SEC to ensure that the playing field is even for all investors and does not favor sophisticated players.
   High frequency trades occur when firms use computer algorithms to profit from arbitrage and market-making. More than 60 percent of total U.S. stock trading is estimated to involve high frequency trading.
   Niederauer said he would not expect any monumental policy changes or regulatory shifts. “I don’t think they are called for,” he said.
   (Reporting by Rachelle Younglai; Editing Bernard Orr)
   ((rachelle.younglai@thomsonreuters.com; +1 202 898 8411))
Tuesday, 13 October 2009 22:42:14RTRS [nN13201490] {C}ENDS

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