Dame Clara Furse, non-executive director of Japanese investment bank Nomura, will chair a UK government study into computer-generated trading techniques, including high-frequency trading and the use of advanced trading algorithms.
The Foresight project, initiated by the Department for Business, Innovation and Skills, will examine how computer trading might evolve in the next decade or so, and the challenges and opportunities this will present for trading firms and financial institutions.
Furse was the chief executive of the London Stock Exchange between February 2001 and May 2009.
Headed by professor Sir John Beddington, government chief scientific adviser, the study is currently expected to last 15-21 months. Announced in November 2010, the project – entitled ”The future of computer trading in financial markets' – is intended to influence future government policy.
Furse will chair the lead expert group, a committee of members appointed to ensure the study maintains the highest possible standards. Other members include Andy Haldane, executive director, financial stability at the Bank of England, and Kevin Houston, chairman of trading technology provider Rapid Addition and co-chair of the global technical committee of FIX Protocol Limited, the standards-setting body for trading communication.
“The evidence-based analysis that [the project] will produce will help us understand how computer trading in financial markets could evolve and impact on financial stability,” said Furse. “This is a fundamental issue for the efficiency and integrity of global financial markets and the economies they serve.”
Public concern over the automation of the financial markets grew last year following the ”flash crash' of 6 May 2010, in which a broker algorithm triggered a temporary US$1 trillion crash in the value of the US stock market.