First Ever High Frequency Trading Transaction Tax Introduced In Italy

[Emily]

http://www.zerohedge.com/news/2013-09-02/first-ever-high-frequency-trading-transaction-tax-introduced-italy

First Ever High Frequency Trading Transaction Tax Introduced In Italy
Tyler Durden's picture
Submitted by Tyler Durden on 09/02/2013 12:53 -0400


Nearly four years after Zero Hedge first suggested an HFT tax should punish algos that "churned" quotes and blasted empty bids and offers to stimulate "momentum ignition" strategies, and generally corrupt market structure in a way that lead to both the flash crash, the BATS IPO farce, the FaceBook IPO debacle and the Nasdaq 3 hour crash, the first such tax is now a reality. And while it is not, and likely never will be implemented in a major (if declining) exchange such as the NYSE or Nasdaq, the first country to finally put an end to millions of parasitic empty quotes is Italy...

In the US, the practice of HFT wastes government legal resources protecting big Wall Street firms in disputes with ex-employees:

http://www.informationweek.com/security/attacks/feds-charge-wall-street-traders-with-cod/240160543

High-frequency trading involves exploiting small stock-price fluctuations, and firms may execute an enormous number of such trades in just a fraction of a second. The algorithms underpinning those systems are closely guarded secrets, and can earn a firm hundreds of millions of dollars per year.

But the theft of related, proprietary source code and algorithms from financial firms isn't rare, according to a Wall Street & Technology report, which last year counted at least six related U.S. prosecutions since November 2010. Those cases involved employees at such banks as Goldman Sachs, Societe Generale and the Federal Reserve Bank of New York. In many instances, the accused appeared to have been motivated by the lure of higher salaries at other firms, as well as a sense of ownership over algorithms they'd helped to develop.