![]() ![]() ![]() The proposal calls for the creation of both ethical and technical standards to better control and reduce the risks associated with high frequency trading that the authors define as any automated or algorithmic trading system that enters computer-generated order requests engages in market making, statistical arbitrage or other trading strategies that employ automated decision-making and provides liquidity to the marketplace. Van Vliet says the proposal has also been circulated among members of the Securities Exchange Commission as well as the Commodities Futures Trading Commission. In addition to Van Vliet, three others have authored The Rationale for HFT 9000: An ISO 9000-Style Quality Management System for High Frequency Trading. (To view the proposal, go to .) They are Andrew Kumiega, adjunct professor at the Illinois Institute of Technology Rick Cooper, assistant professor at the Stuart School and Jim Northey, of the LaSalle Technology Group and a member of the standards committee for X9.org, ANSIs financial services division. Now its time in the age of high-speed automation for the trading industry to adopt them as well. ∾very other mission-critical industry in the world that poses major societal risks aerospace, chemical, health care and nuclear power have adopted ISO 9000 standards, says Ben Van Vliet, an assistant professor of finance at the Stuart School of Business at the Illinois Institute of Technology and one of four authors of the proposal. In the United States, a proposal calling for a set of guidelines similar to the ISO 9000 a series of international guidelines aimed at quality control in the manufacturing industry which has also been applied to a broader range of industries, including the capital markets for automated and high frequency trading activities was submitted on August 6 to the financial services division of the Washington, D.C.based American National Standards Institute, which is the U.S.-based division of the International Standards Organization (ISO), a Geneva-based nonprofit that oversees and manages testing standards for products and devices developed by a range of industries. In the aftermath of the Knight Capital Groups technical glitch, a call to introduce formal testing standards for automated and ultrafast trading is taking shape faster than a speeding bullet. ![]()
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