Leading members of the buy-side, sell-side and trading venue communities have formed a cross-industry, Europe-wide body to aid better understanding of key market issues.
The group, called the Alpha Traders Forum (ATF), includes representatives from Deutsche Börse, BATS Europe, Turquoise, Goldman Sachs, Credit Suisse, UBS, Instinet, AXA Investment Managers, Fidelity, Ignis Asset Management and Franklin Templeton.
The ATF held their second meeting in London on 10 June and agreed to investigate the viability of producing an opinion paper on high-frequency trading. The aim of such a paper would be to provide a region-wide, holistic industry view of high-frequency trading to better help the general public, regulators and other market participants understand its impact on the market.
High-frequency trading, i.e. trading strategies with an extremely short-term time horizon, has been under increasingly scrutiny in recent years, with many buy-side participants citing it as a primary cause of the recent 6 May ‘flash crash’ in the US.
According to a recent study from consultancy Aite Group, high-frequency strategies, which include electronic market making and latency arbitrage, account for 25% of European cash equities trading flow and is predicted to rise to 45% by 2012.