HFT (High Frequency Trading) Effects on Investors

Increased Regulation

8. Increased Regulation

High frequency trading has the potential to increase regulatory oversight of investments taking place on any exchange. This has a direct impact on large and small investors alike. With increased regulation comes less competition, as market players that can not maintain adequate controls against HFT errors or questionable behaviors leave. More regulation also has the potential to increase the cost of investing for individual investors, pension funds, and mutual funds, making it difficult to generate enough return over the long haul to justify investing in the first place.

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