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Aug 02, 2012

“Speed Limit” for High Frequency Traders

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For many foreigners, Germany is famous for its “autobahns”, where drivers are usually permitted to drive as fast as their cars and traffic allow and without being restricted of an official speed limit. So far, this also has been true for using trading venues in Germany. However, the German Government now plans to introduce a “speed limit” for electronic trading on its regulated markets and multilateral trading facilities. A new draft piece of legislation now purports to introduce for the first time a dedicated regulatory framework for algorithmic trading on German trading venues and high frequency traders would be subject to a license requirement with, and supervision by, the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht; “BaFin”).

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