Criminal Regulations Regarding Abuse Of High Frequency Trading In The Securities And Futures Market

High-frequency trading,which originated in the US stock market,is a product of the era of financial technology.As a "sharp weapon" in the financial world,it also has a certain degree of negative impact on the market.With the occurrence of Iston’s manipulation of the futures market,our country’s high-frequency trading has begun to take shape.With the help of high-frequency trading,the crime of manipulating securities and futures markets is not only highly concealed,but also more harmful to society,which poses a challenge to our country’s judicial practice.Spoofing can be said to be a typical criminal act of abusing high-frequency trading to manipulate the market.It has now been clearly included in the provisions of our country’s Criminal Law.It is necessary to further distinguish the legal and illegal boundaries and clarify the judicial determination standards.Our country’s securities and futures market system is in the process of vigorous innovation and reform.With the process of global economic integration,the future trading market will become more technological.Learn from advanced regulatory experience outside the region,improve our country’s high-frequency trading regulatory system,and severely crack down on illegal and criminal acts of abusing high-frequency trading to manipulate the market.This paper is divided into four chapters to discuss the issue of criminal law regulation of the abuse of high-frequency trading in the securities and futures market.The first chapter takes the first case of abusing high-frequency trading to manipulate the futures market in our country——the "Ishton case" as an example,analyzes the identification ideas in this case in detail,clarifies the market transaction logic from the transaction data in the case,and analyzes the specific ways of operating the market.High-frequency trading itself is not illegal.However,in order to pursue high profits,some criminals take risks and abuse high-frequency trading technology strategies,which has caused great social harm to the financial capital market.It not only seriously interferes with the normal order of the market and causes blockage of market circulation,but also seriously violates the legitimate interests of other investors,causing huge losses to citizens and society.From the current situation of our country’s supervision of high-frequency trading,due to the unfamiliarity with the emerging thing of high-frequency trading,judicial practice has difficulties in the regulation of such abuse of high-frequency trading.It is impossible to accurately distinguish between legitimate and illegal acts,and the standards for the determination of securities and futures market manipulation are unclear.Insufficient regulation leads to weak supervision.It is urgent to solve the above legal problems and improve our legal system.The second chapter firstly defines the connotation of high-frequency trading,and through the demarcation of concepts such as programmed trading and algorithmic trading,accurately grasps the market logic of high-frequency trading,and then thoroughly analyzes the risk of high-frequency trading.Then,the relationship between high-frequency trading and market manipulation can be clarified,and the boundaries between legitimate and illegal acts can be reasonably distinguished.The essence of high-frequency trading is a trading strategy based on complex computer algorithm programs,and its main uniqueness is ultra-high speed and high frequency.High-frequency trading can provide a certain amount of market liquidity and reduce transaction costs,but at the same time,there are automated systemic risks.The ultra-high-speed technical advantages of high-frequency exchanges lead to inequality in the market game with other ordinary investors,affect the fairness in the market.The third chapter combines the theory of market manipulation to clarify the nature of the abuse of high-frequency trading manipulation.Under the hypothesis of efficient market,market manipulation has considerable characteristics of fraud,but under our legal system,the essence of market manipulation cannot be attributed to fraud.The essence of criminal behavior should be understood around the connotation of the core word "manipulation".Manipulating the securities and futures market is man-made,and at the same time,there must be factors of abuse of advantage or influence.In the abuse of high-frequency trading manipulation,the algorithmic technology and transaction speed advantages of high-frequency trading are abused by criminals and become the key means of artificially interfering with the market and violating crimes.In terms of judicial determination standards,as far as spoofing behaviors are concerned,the objective behavior must have frequent or a large number of order cancellations,which can be combined with comprehensive judgments such as the number of orders canceled and the transaction ratio;the subjective aspect must be "Not for the purpose of transaction",which is also an important difference between spoofing and legitimate high-frequency trading.By means of presumption,the subjective intention should be fully judged from the objective behavior.The fourth chapter is mainly to further improve the criminal regulation path of abusing high-frequency trading in our country.At present,spoofing fraud has become a new type of market manipulation behavior in our country’s securities and futures market,and other abuses of high-frequency trading,such as order plugging and high-speed order testing,also have great social harm and criminal penalties.According to the homogeneous interpretation rules,other abuses of high-frequency trading to manipulate the market that meet the elements of criminal law can also be included in the scope of the bottom line.Inspect the regulatory system of high-frequency trading outside the territory,and learn from its advanced regulatory experience to help improve our country’s high-frequency trading regulatory system.As a result of technological progress,high-frequency trading is not so "evil" that it must be strictly prohibited,and regulatory agencies in foreign countries have appropriately restricted high-frequency trading.In recent years,our country has initially carried out the supervision of programmatic transactions.For high-frequency trading,regulators should maintain a balance between promoting financial technology innovation and maintaining market stability,and gradually adopt regulatory measures,such as establishing a reporting system for institutional investors and improving the supervision system of exchanges,create a better stable and efficient capital market.