Schneiderman's announcement about curbing HFT's unfair practices this week may have drawn another Wall Street firm into the conversation. On Thursday, Gary Cohn, co-president and chief operating officer of Goldman Sachs, published an op-ed piece in the Wall Street Journal, titled, “The Responsible Way to Rein in Super-Fast Trading.”
Citing multiple technology failures that have occurred in the equity markets, Cohn suggests specific measures “to limit the risk and instability,” caused by the fragmented, complex equity market structure, which is amplified by speed of execution. He calls for “stronger safety net of controls" to cope with sophisticated routing algorithms, constant software updates and an explosion in electronic order instructions.
On the HFT front, Cohn favors applying regulatory fees to the participants that generate excessive message traffic. Even though big Wall Street firms like Goldman subscribe to the faster proprietary feeds, Cohn’s piece surprisingly agrees with the NY AG’s position on market data. “Public market data should be disseminated to all market participants simultaneously,” wrote Cohn, suggesting that exchanges should not provide proprietary feeds that are disseminated fractions of a second faster. ”Reducing the possibility of differentiated channels for market data also reduces incentives that favor investment in the speed of one channel over the stability and resiliency another,” wrote Cohn.
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio