FAIR Canada has provided comments in support of IIROC’s regulatory approach with respect to the use of trading strategies involving high frequency trading (“HFT”) and any form of automated order system that are manipulative or deceptive. In our submission, FAIR Canada advocates that Canadian regulators adopt the following fundamental principle: Sophisticated users of automated order entry and direct electronic access that deploy very short term trading strategies should not be permitted to take unfair advantage of investors who rely on the provision of fair and efficient securities markets for investment purposes.
FAIR Canada also stresses the importance of ensuring equal access to information, questions the practice of permitting of co-location services by exchanges and others, and questions whether the “maker-taker” fee model has unintended effects including to reward HFT for trading that is of no benefit to the market and may undermine investor confidence in market integrity. Further, FAIR Canada notes that IIROC is undertaking a study of HFT activity in Canada and that it will be important for regulators to act on the study’s findings in a timely manner.
