Research On The Supervision Mechanism Of High Frequency Trading In The United States

After the occurrence of the "East China Oolong Finger" incident and the Easton case,the term high-frequency trading is increasingly known in the country,which is accompanied by misunderstandings and panic.Under such circumstances,a proper regulatory system should not only maintain market fairness and stability,but also play a guiding role.In recent years,China has increased its emphasis on the supervision of high-frequency trading.With the introduction of a series of measures,a relatively complete supervision system has gradually formed.However,there are still some problems with this system.For example,excessively strict regulatory measures have inhibited technological development;the mechanism for dealing with abnormal market conditions needs to be further improved;and there are loopholes in the legal regulation of high-frequency trading behaviors that damage market fairness.After the "flash crash" incident in 2010,the United States successively introduced a package of regulatory measures to successfully control the risk of high-frequency trading,and its successful experience is worthy of reference.From the perspective of comparative law,this article studies the US high-frequency trading regulatory system.There are four chapters in this article:The first chapter starts with the concept of high-frequency trading.First,from adefined point of view,a simple distinction is made between high-frequency trading,algorithmic trading,and programmatic trading.Then,the characteristics of high-frequency trading are referred to with reference to the results of the US Securities and Exchange Commission.A brief introduction was made to clarify the concept of high-frequency trading.The second chapter starts with the trading strategies of high-frequency trading in the US market.According to the definition of the US Securities and Exchange Commission,they are divided into four categories: market maker strategy,arbitrage strategy,structured strategy and trend strategy.A series of risks arising from the four strategies,including the instability and unfairness of high-frequency trading.The third chapter is to sort out and learn from the US high-frequency trading supervision system.The high-frequency trading supervision system in the United States mainly includes information collection and daily monitoring mechanisms for high-frequency trading behaviors,market filtering mechanisms for high-frequency trading behaviors represented by the "Market Access Rules",and restriction mechanisms for specific high-frequency trading behaviors.The high-frequency trading behavior triggers an emergency handling mechanism for market abnormalities and the legal regulations for high-frequency trading "spoofing" behavior.At the end of this chapter,the enlightenment of high-frequency trading supervision in the United States to China is expounded,that is,the supervision mechanism should closely follow the changes of financial instruments,industry self-discipline is an important supplement to administrative supervision,and differentiated supervision within the same supervision framework is the trend of the times.The fourth chapter is the reference significance of American supervision experience to our country.First,the current status and risks of high-frequency trading in China are described,and then suggestions are proposed for the supervision of high-frequency trading in China,that is,to use the "Market Access System" to establish a regulatory system that combines administrative supervision and industry self-discipline,and to learn from US wrong transactions.The application systemimproves the handling mechanism of abnormal market conditions and draws on the "Dodd-Frank Act" to improve relevant laws on high-frequency trading.