European HFT firms band together
European high-frequency trading (HFT) firms – including Optiver, IMC and Getco’s European arm – have formed a unified trade group within the Futures Industry Association (FIA).
The FIA European Principal Traders Association (EPTA) will discuss issues affecting the European proprietary trading community, the trade body said today (Tuesday).
Remco Lenterman, director of Dutch high-frequency trading firm IMC, will serve as the group’s chairman. Membership is limited to those firms that trade primarily on their own account, rather than on behalf of customers.
Having originated in the US equity and futures markets, algorithmic trading firms are increasingly turning their sights to the electronic FX market. However, in May EuromoneyFXNews revealed that FX market makers were seeking to create a bank-only execution platform, excluding high frequency forms because they were able to arbitrage slower pricing technology that banks operate. For instance, HFT firms make up four of the top 15 clients on EBS, Icap’s inter-dealer trading system.
Public policy and regulatory issues are likely to be at the forefront of the new group’s discussions. HFT firms have faced increasing scrutiny in the wake of the May 2010 flash crash.
“In the aftermath of the financial crisis and the increasing attention of the press and regulators to market structure, the need for a group that represents principal traders has never been more apparent,” says Lenterman. “Partnering with the FIA will enable principal traders in the EU to benefit from the knowledge, organization and network of the FIA.”
The FIA set up a similar trade body, the FIA Principal Traders Group, in the US last year. “Financial reform is a global issue. Creation of the FIA EPTA comes at a critical time as policymakers in Europe, the US and elsewhere are writing rules that will change how our markets work,” says FIA president John Damgard. “It is especially important that there be a voice in Europe for this important segment of our markets.”