US Democrats to support transaction tax on HFT

Clinton's presidential platform will include a proposed tax on what it calls the speediest traders.

US Democrats have backed a proposed trading tax on US exchanges to curb high frequency trading (HFT), according to the party’s draft platform.

“We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets,” the document said.

Hilary Clinton, the party’s presumptive nominee for President, has frequently backed a tax on HFT, in a bid to expand the Dodd Frank Act, toughen rules on Wall Street, and to appeal to supporters of her Democratic presidential candidate rival Bernie Saunders.

Regulators have sought to introduce a financial transaction tax (FTT) in Europe and the US but have witnessed industry-wide criticism, warning a tax would dramatically sap liquidity from electronic markets.

Meanwhile the US derivatives watchdog, the Commodity Futures Trading Commission (CFTC), is currently drafting new regulation on automated trading (RegAT), that will monitor algorithmic trading and to curb predatory HFT activities.