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Both SEC And FINRA Admit That The Market Is Rigged (And They Are Powerless To Fix It)

Tyler Durden's picture




 

Curious why investors are bailing out of the market, or rather "market" - which trades a few basis points away from its all time highs on nothing but central-bank liquidity and multiple expansion fumes - at a pace unseen since 2009? Well, the fact that not only an SEC commissioner, but the Chairman of Finre himself admit the market is rigged may have something to do with it...

First, here is SEC commissioner Luis A. Aguilar, who unlike his former CFTC peer Bart Chilton hasn't been purchased by the HFT lobby yet, with "Enhancing Oversight of Our Equities and Options Markets." An excerpt:

A Rule Better Aligned with the Current Marketplace

Being able to identify and respond to emerging trends is the hallmark of any effective regulator. Although long overdue, the proposed amendments are intended to bring Rule 15b9-1 in line with the realities of today’s securities markets. Specifically, the proposed amendments, if adopted, would achieve three things:

  • First, they would do away with the de minimis allowance and its corollary, the proprietary trading exception.
  • Second, they would create a new, limited exemption for hedging. This proposed exemption recognizes that dealers trading primarily on one exchange may have a legitimate need to hedge their exposure through trades on other exchanges. To qualify for this exemption, however, dealers must be able to prove that their hedging transactions are legitimate hedges. Dealers can do this only by demonstrating that the sole purpose of their hedging transactions is to offset the risk of their floor-based activities. Dealers must also establish and enforce written policies and procedures ensuring that each hedging transaction meets this requirement.
  • Third, they would require HFT firms that currently rely on the de minimis and proprietary trading exceptions to register either with an association, or with all of the exchanges on which they transact.

These changes are generally appropriate and should achieve their stated goals. But, there are some causes for concern. First, the Commission currently has no data regarding the nature or extent of floor members’ current hedging activities. Unless firms provide such data, it will be difficult for the Commission to make an informed decision as to whether the proposed hedging exemption is warranted and appropriately tailored. Second, the release includes questions suggesting that the Commission may consider expanding the hedging exemption to include other, as yet unspecified, activities. This is a discordant note in an otherwise measured approach, and it would not be prudent to pursue this course unless commenters demonstrate a legitimate need for such an expansion, and justify that need with reliable data.

The Need for Enhanced Market Oversight

 

Turning to the proposal to end certain HFTs’ reliance on Rule 15b9-1, it is important to understand that this will bring the largest HFTs within the supervision of an association or the exchanges that execute their trades. Why is this so important? There are several reasons.

 

First, it will enhance oversight of cross-market trading. Currently, when an HFT that is not a member of an association executes an off-exchange trade, the HFT’s identity is usually not reported to the Financial Industry Regulatory Authority, or FINRA, which is the only association currently in existence. This frustrates FINRA’s surveillance efforts as it cannot quickly link trades to the HFTs responsible for them. This is a serious problem because, according to FINRA’s current Chairman, certain market participants disperse their trading activity across multiple markets in an attempt to hide various forms of market abuse, including layering, spoofing, algorithm gaming, and wash sales. The proposed amendments to Rule 15b9-1 will help provide FINRA and any other associations that may be formed in the future with a richer and more detailed audit trail, which will help them spot abusive trading practices more effectively.

 

Second, it will help ensure accountability. Even when an HFT engages in abusive trading, FINRA is powerless to address it if the HFT is not a member. The proposed amendment would require HFTs to join an association like FINRA or all the exchanges on which they trade. This will ensure that these HFTs can be held responsible for any potential misconduct.

 

Third, it will ensure that the intent underlying Regulation ATS is not frustrated. Regulation ATS precludes ATSs from acting as self-regulatory organizations, and instead requires them to register as broker-dealers and join an association. Associations like FINRA are thus charged with monitoring trading activity on ATSs, but this regulatory scheme is undermined if the HFTs that account for almost half of all trades on ATSs are not subject to any association’s jurisdiction.

 

Fourth, requiring all HFTs to join an association or additional exchanges will help provide the Commission with a more complete and detailed picture of HFTs and their cross-market trading activity. It is crucial for the Commission to have an accurate understanding of HFTs’ behavior so that it can make informed and objective decisions in deciding how best to regulate HFTs. This is especially important given the various competing claims that have been made about the legality and social utility of certain trading practices used by HFTs.

 

With Great Data Comes Great Responsibility

 

Requiring HFTs to become members of a registered national securities association or of all the exchanges on which they trade will provide a more complete and detailed picture of their cross-market trading activity. This will help regulators develop a richer understanding of HFTs’ behavior, and every effort should be made to leverage this understanding into a more effective market oversight program. In particular, regulators should use the additional information they would receive under the proposed amendments to fine-tune their surveillance techniques to the unique issues posed by HFTs. This will improve efforts to ferret out potential trading abuses, and help regulators spot new types of abuses that may develop in the future.

And here is Richard Ketchum, Finra Chairman with selected excerpts from his remarks from the 2014 FINRA Annual Conference:

FINRA is determined to be a key engine in restoring trust in the securities markets. Can we solve all of this country's consumer and market issues? No. But we can tackle many of them—and how we do that is what I'm going to focus on this morning.

 

* * *

 

Even though the markets are widely fragmented, FINRA's ability to pull together data across exchanges and alternative trading systems allows us to see one big, virtual market instead of a disjointed patchwork of individual markets. 

 

This is powerful stuff—because there are market participants out there who are actively dispersing their trading activity across markets in an attempt to avoid detection. With our cross-market surveillance program, we can run dozens of surveillance patterns and threat scenarios across our mountain of data to look for, among other things, layering, spoofing, algo gaming, wash sales and other manipulative and distortive conduct.

 

Because of the sophistication of these patterns, we are detecting things that we had not been able to see before: 

 

over 80 percent of our cross market alerts involve conduct occurring on more than one market;
over 50 percent of our cross market alerts involve two or more market participants.

 

In addition:

  • we have more than 170 investigations open concerning abusive algorithms, inadequate supervision of algorithms and deficient order controls; and,
  • we have brought cases against firms for inadequate market access controls and manipulative conduct. In fact, just last week we brought a case jointly with CBOE (on behalf of our options exchange clients) involving a cross product manipulation scheme where waves of equity trades were used to artificially impact options pricing.  

While we believe our cross-market surveillance program is a major step forward, there is so much more that we can do. Other market integrity initiatives we have underway include:

 

  • We recently received SEC approval for our "self-trade" rule that is designed to limit self-trades that could have an adverse impact on the markets and price discovery. 
  • In November, a rule will go into effect that will require all ATSs to use a unique market identifier (an MPID) to report volume executed on an ATS. This will bring certainty and consistency to how ATSs are flagged in our audit trail and surveillance systems.
  • And we are thinking of other rules that might be useful to help detect and take action against abusive trading.

And while these changes and initiatives stand to be beneficial, the biggest game changer will be the implementation of the Consolidated Audit Trail or CAT.

And so on, you get the picture: not only do both the SEC and FINRA finally admit they have been largely clueless to HFT manipulation in the market over the past decade, ever since they so wisely allowed Reg NMS to pass and make a mockery of price discovery, but - more importantly - they also admit that there are "certain market participants disperse their trading activity across multiple markets in an attempt to hide various forms of market abuse, including layering, spoofing, algorithm gaming, and wash sales." Replace "certain" with most when it comes to HFTs who now are the vast majority of all "traders", and you have a pretty good picture of what is going on in the market.

 

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Sat, 03/28/2015 - 17:05 | 5937705 Thirst Mutilator
Thirst Mutilator's picture

Expel all the jews & see if things don't get a little better...

Sat, 03/28/2015 - 17:09 | 5937711 XqWretch
XqWretch's picture

Worked for Germany, until they decided to start invading people

Sat, 03/28/2015 - 17:22 | 5937731 y3maxx
y3maxx's picture

Thirst.... Agree...logical that Israel is home to these HOT firms....they control NASCAR, Stuxnet and everything else.

Sat, 03/28/2015 - 17:46 | 5937785 Greenskeeper_Carl
Greenskeeper_Carl's picture

"The market is rigged and we are powerless to fix it"

Please, what a crock of shit. They could fix it in a week if they wanted to, they just don't. All the benevolent powers the government has arbitrarily granted themselves over us all, and they cant figure this out. Here ya go, SEC, a freebee from Greenskeeper Carl, from me to you:

Just let the free market set the interest rate rather than fed manipulation, and STOP BAILING THESE  FUCKING BANKS OUT and it will fix itself in short order. All those parasites will go bankrupt, the stock market will finally find it's true (much lower)value pretty quick too

Sat, 03/28/2015 - 17:53 | 5937802 Bay of Pigs
Bay of Pigs's picture

And gold and silver would double or triple overnight as well.

Sat, 03/28/2015 - 18:14 | 5937845 remain calm
remain calm's picture

JUST HAVE THE SEC GO ON CNBC AND ANNOUNDE THAT THE MARKETS ARE RIGGED, THAT WOULD FIX IT. Who in their right mind would watch a basketall, or footbal or soccer game if they new it was rigged? Exactly. And that would fix Wall street. Nodody would play until they new the field was level.

Sat, 03/28/2015 - 19:56 | 5938102 philosophers bone
philosophers bone's picture

My question is very simple. Leaving aside how HFT firms have been regulated in the past or will be regulated in the future, are you investigating whether they were involved in market manipulation? You have broad authority to investigate and punish for market manipulation.

So if you are not doing that, STFU you are part of the problem.

Sat, 03/28/2015 - 21:48 | 5938317 weburke
weburke's picture

they are dodgeing blame for coming troubles. yes it is a lie.

Sat, 03/28/2015 - 22:51 | 5938444 Manthong
Manthong's picture

The financial co-pilot has locked the cockpit door on the regulators so they may as well have the flight attendant serve up a few doubles, kick back in first class and wait for the abrupt landing.

Sat, 03/28/2015 - 19:50 | 5938089 TheFutureReset
TheFutureReset's picture

Just limit the trades per second to 10.

Sat, 03/28/2015 - 19:03 | 5937956 PartysOver
PartysOver's picture

Expel all the jews & see if things don't get a little better...

Oh, yes.  Blame others for your shortcomings.  It is in vogue. 

Sat, 03/28/2015 - 21:34 | 5938293 Remington IV
Remington IV's picture

how was the sabbath ???

Sat, 03/28/2015 - 22:02 | 5938350 one_hundred
one_hundred's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com

Sun, 03/29/2015 - 09:50 | 5938986 raywolf
raywolf's picture

When in doubt blame the traders... don't blame trillions in paper money printing, don't blame inept, talentless and stupid polticans, don't blame a broken (and fascist) govt model with rampant cronyism, don't blame useless regulators.... NO NO... blame the guys putting their ass on the line to take risks....

Sat, 03/28/2015 - 17:09 | 5937710 kaiserhoff
kaiserhoff's picture

A few public hangings would do this country a world of good.

Sat, 03/28/2015 - 17:16 | 5937723 cossack55
cossack55's picture

So....a few would be what? 10k? Maybe start with 5k and expand from there.  Using hemp, of course.  I'm down.

Sat, 03/28/2015 - 20:28 | 5938179 Shad_ow
Shad_ow's picture

Not really.  Start with about 20 and then the others would confess and pony up their ill-gotten gains, hoping to get life in prison.  That is if they were caught before they got out of the country.

Sat, 03/28/2015 - 20:05 | 5938131 venturen
venturen's picture

can we skip the trial...I am good with a hammer and have lumber and a rope

Sat, 03/28/2015 - 17:09 | 5937712 Double.Eagle.Gold
Double.Eagle.Gold's picture

time for a benevolent autocratic ruler.

Sat, 03/28/2015 - 17:11 | 5937714 cornfritter
cornfritter's picture

"It's the very design of the hen house itself that's facilitating the coyote's entrance", replied the fox, shortly after sneezing out another feather

Sat, 03/28/2015 - 17:31 | 5937733 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Exactly considering the bullshit premise they can't determine who's algos are sending data using a packet sniffer and just passively monitoring all traffic on the exchanges (which is their legal right as regulatory agencies). They most certainly can identify where the traffic from a particular algo burst is coming from. If they can't get ip or network addresses (which they should have legal rights to trace back to an owner), they should be able to get a mac address which they should by legal means be able to cross reference in the NSA's treasuremap system (which is known to log mac addresses) when it comes to doing their regulatory duties.

There really is no reason they shouldn't have access to these databases to perform their regulatory duties. Just need to define how much access. Giving them simple lookup rights relating to improper algo traffic which they can prove via traffic logs should be sufficient. Give the regulatory agencies the tools and means to trace network traffic back to an owner.

Force these algo traders to make a choice, play by the rules or be penalized precious miliseconds being forced to route traffic through proxies and other anonymizing networks if they want to cheat.

Sat, 03/28/2015 - 17:34 | 5937754 RaceToTheBottom
RaceToTheBottom's picture

Any system not designed in support of regulation is designed for abuse of the regulation.

Designing for "Innovative financial products" is just bullshit

Sat, 03/28/2015 - 17:37 | 5937759 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

And not only that if you can't trace it behind said proxy, block all known traffic from said proxy regardless if only some algos using it are cheating but not others. They do that, that will keep the proxy services somewhat honest if they want to be reputable. Someone will make money offering high speed anonymous networks that are built on their own backbone for this purpose alone. They become incentivized to keep it honest if that is the case.

Sat, 03/28/2015 - 17:40 | 5937773 cornfritter
cornfritter's picture

It's all theatre friend, make sure you got a good exit strategy to the country in case the curtain comes down hard and fast - and obviously that's no safety *guarantee* considering airborne weapon systems.  You don't have to be able to run the fastest, just faster than the FSA, might need a little sugar to get thru the military lines too.

Sat, 03/28/2015 - 17:15 | 5937720 _ConanTheLibert...
_ConanTheLibertarian_'s picture

The vacuum tube joke (check image) is getting old.

Sat, 03/28/2015 - 23:40 | 5938533 StychoKiller
StychoKiller's picture

Would you recognize a transistor if you saw one?

Sun, 03/29/2015 - 04:34 | 5938780 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Yes

Sat, 03/28/2015 - 17:15 | 5937721 kill switch
kill switch's picture

Both SEC And FINRA Admit That The Market Is Rigged (And They Are Powerless To Fix It)

 

Shut them both down we can save a little on their overhead..

Sat, 03/28/2015 - 17:42 | 5937778 cornfritter
cornfritter's picture

Or put Martha Stewart on the case

Sat, 03/28/2015 - 18:38 | 5937892 TheAntiProgressive
TheAntiProgressive's picture

Fire 25% and assign a new chairman that will promise to indeed "fix it".  Make the lemmings all understand that another 20% will go if expectations are not met.  Repeat until someone in these parasitic obese organizations gets a clue.  Or fire them all and offer new jobs and "incentivise" the savings achieved.  Start fining people big time.

Sat, 03/28/2015 - 20:07 | 5938134 yrbmegr
yrbmegr's picture

That will certainly fix the problem.

Sat, 03/28/2015 - 17:17 | 5937726 Pol Pot's Plant
Pol Pot's Plant's picture

How about instituting a Year Zero for HFTs.

Sat, 03/28/2015 - 17:23 | 5937742 MedicalQuack
MedicalQuack's picture

Why do you think Wall Street wants anyone but Elizabeth Warren for President?  She's the only one who knows what goes on over at the Office of the Comptroller of the Currency, a real party she said.  That was a few months ago and he time at the Consumer Financial Protection Bureau I'm sure gave her some some insight.  It had to be a slap in the face to see Cordray, who was probably hand picked by the likes of Citi and JPMorgan get the top job.  I said he would be a dud when nominated and he's been right on course, even to buying up our credit card transactions just like banks and insurers too.  He hangs around and goes after some low hanging fruit as that's about all he's capable of, just another lost lawyer who thinks legal verbiage stands a chance against code that cheats and fiddles with risk.  

http://ducknetweb.blogspot.com/2013/04/richard-cordray-fail-with-understanding.html

http://ducknetweb.blogspot.com/2014/08/argus-analytics-produces-share-of.html

We all remember MaryJo White at the SEC with her huge affliction of what I call the Sebelius Syndrome of the markets not being rigged.  Sebelius got the name but plenty more than her have the affliction of not being able to tell the difference between virtual and real world values.  

Here comes the next rig and it's with the news and it will use jounobots to also impact stock prices as they can fire these little stories in at any time and the stock bots don't know any different and oh by the way you might have to pay for the ability to read some of these articles by charging 20 cents on your credit card since they want more behavioral data to sell about you.  NYT and WSJ and a few other big media companies are said to be in on the deal so if they do their thing with Facebook, you might have to pay 20 cents to read on their site.

FINRA and the SEC will even be further frustrated when this new element (model) kicks in as more and more find out you can't just have legal verbiage regulate the coders anymore...

http://ducknetweb.blogspot.com/2015/03/major-us-newspapers-sign-up-and-invest.html

 

Sat, 03/28/2015 - 17:26 | 5937747 you enjoy myself
you enjoy myself's picture

this drives me crazy because a solution to most of the concerns is so simple:

- all offers live for at least 1 second.  ideally, it's a random minimum time-to-live between 1 and 3 seconds.

- no subpenny bids or asks for anything over $1.

 

if you can't trade in a world with the above rules then you're not actually providing liquidity, are you?

 

Sat, 03/28/2015 - 17:34 | 5937756 kaiserhoff
kaiserhoff's picture

Agreed.  Enforcement of a few simple rules would cure this in a New York minute.

Sun, 03/29/2015 - 03:11 | 5938738 Element
Element's picture

Like tomorrow morning simultaneously breaking-up the TBTFs and removing duel-nationals from the Treasury and forcing divestment of the Federal Reserve to public hands and simultaneous removal of duel-nationals from all FED operations and positions?

(would there be anyone left? ... other than the cleaning staff and people operating the paper and hard drive shredders?)

 

Sat, 03/28/2015 - 18:41 | 5937900 TheAntiProgressive
TheAntiProgressive's picture

Make sure they can't cancel orders at the nano-second mark.  An order is an order and is firm at the 1 minute mark.  Sell or Buy, no takebacks.

Sun, 03/29/2015 - 02:57 | 5938732 Sanity Bear
Sanity Bear's picture

HFT is only part of the problem, and in my opinion the smaller part overall.

 

The real problem is that actual capital has to bid against legalized central bank currency counterfeiting. Bidding one's hard-earned capital against printed money created by the Fed real effective interest rate of -1.75% is insane; you're basically subjecting your savings to the backlash of an arbitrage play against the currency, that when it unwinds is guaranteed to hit the value of your invested capital like a nuclear bomb.

Sat, 03/28/2015 - 17:30 | 5937750 fxpmtrader
fxpmtrader's picture

Nevertheless there are still way enough (as dumb as the night is dark) idiots which still (think they) "trade" in these "markets".

And all these rants here lead to absolutely nothing - as long as there are still these dumb sheeple out there.

As as long as the sharks, crocodiles and gorillas have (seas of dumb) food out there - they would be even dumber not to consume these (as dumb as the night is dark) fish.

Billions of dumb and ignorant animals.

Fucked by a handful of oligarchs - since Stonage.

What a worthless and useless creature.

Sat, 03/28/2015 - 17:30 | 5937752 negative rates
negative rates's picture

Well if you're commenting today, you are prolly not one of them.

Sat, 03/28/2015 - 17:35 | 5937755 ebworthen
ebworthen's picture

They'll have a lot of meetings and conferences, well catered of course.

Making a cool $100K+/year, with full benefits, so it will take some time to make a decision.

And when they do make a decision, it will take a couple years to get it through Congress, watered down and stripped of any power to jail anyone, and the "enforcement" will be a 0.5% fine of annual trading income.

A news conference and a feature on the Nightly News and the PBS "everything is under control" hour that everyone's retirement is safe thanks to "new legislation".

Sat, 03/28/2015 - 17:38 | 5937769 i_call_you_my_base
i_call_you_my_base's picture

More data / oversight is irrelavant if they don't prosecute or enforce the law.

Sat, 03/28/2015 - 17:42 | 5937777 cigarEngineer
cigarEngineer's picture

Spoofing sucks, and the HFT vampires are destroying the market, but I'm 100% sure that government regulation is not the way to fix this. Introduce random 100-300ms delays for all orders on the exchange level and leave it anonymous.

Sat, 03/28/2015 - 17:55 | 5937807 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Government regulation is exactly what you want. The more the better. Government intrusion works both ways. The exchanges shouldn't be immune from it while retail isn't.

Sun, 03/29/2015 - 03:03 | 5938734 Sanity Bear
Sanity Bear's picture

Because government can be expected to play fair?

 

All we really need is ONE private exchange to tell the HFT bots to go fuck themselves, at which point every other market participant has a strong incentive not to participate in any other exchange that doesn't adopt the same rule.

Sun, 03/29/2015 - 14:19 | 5939503 SilverSavant
SilverSavant's picture

Yeah, and how soon before the proposers decide to suicide with their nailgun?   Hell, they probably hired one creative soul to come up with the next "nailgun" idea, just so that they can yuk it up on ZH.

Sun, 03/29/2015 - 14:20 | 5939510 withglee
withglee's picture

Bingo!!!!

Sat, 03/28/2015 - 17:44 | 5937784 R19
R19's picture

In other words they're paid off so they can't do anything.  One would think they would at least get some hookers and blow out of it.

Sat, 03/28/2015 - 20:05 | 5938128 yrbmegr
yrbmegr's picture

No, they're understaffed and underresourced compared to Wall Street.  There is not enough money to build and prosecute a case against them.  Government small enough to strangle in a bathtub can't touch Goldman Sachs.

Sun, 03/29/2015 - 03:06 | 5938735 Sanity Bear
Sanity Bear's picture

on the other hand, it also wouldn't be able to ring Wall Street with a tsunami of cops the next time an angry mob storms downtown NYC

Sat, 03/28/2015 - 17:56 | 5937793 kowalli
kowalli's picture

die you lizards. You keep your mouths shut up, while they were robbing us, so you will go down with banksters.

Warning.Rats are trying escape!

Sat, 03/28/2015 - 17:51 | 5937796 q99x2
q99x2's picture

Maybe laws can be passed to make it illegal for pension funds to be held in rigged markets.

Sun, 03/29/2015 - 14:36 | 5939569 withglee
withglee's picture

 

Maybe laws can be passed to make it illegal for pension funds to be held in rigged markets.

http://www.toonopedia.com/bealaw.htm

Furthermore, "They'll do it every time" became a commonly-heard phrase, denoting just such situations as the cartoon featured. "There oughta be a law," on the other hand, was taken from a phrase that was already in use, at least by people who look to the law to relieve their petty annoyances.

Sat, 03/28/2015 - 18:11 | 5937837 Colonel Klink
Colonel Klink's picture

Captain Obvious, please call your office.  Captain Obvious, please call your office!

Sat, 03/28/2015 - 18:44 | 5937904 SpinDrift
SpinDrift's picture

"...because there are market participants out there who are actively dispersing their trading activity across markets in an attempt to avoid detection. With our cross-market surveillance program, we can run dozens of surveillance patterns and threat scenarios across our mountain of data to look for, among other things, layering, spoofing, algo gaming, wash sales and other manipulative and distortive conduct."

Meanwhile, in the land of the slaves, if people want to pull some cash out of a bank and it happens to be some amount / frequency that is deemed "suspicious" then they file a SAR and it triggers a MANTIS ALM alert.

What, SEC/FINRA gonna finally wake up and do their fucking jobs?  Muggy cunts, the lot of them.

 

Sat, 03/28/2015 - 18:59 | 5937942 GMadScientist
GMadScientist's picture

They're just pissed off the bandwidth spikes cause the porn to buffer.

Sat, 03/28/2015 - 19:20 | 5938003 Joebloinvestor
Joebloinvestor's picture

This sounds a lot like the Greek proposals.

Expect NOTHING to correct the situation in both cases.

Sat, 03/28/2015 - 20:03 | 5938119 yrbmegr
yrbmegr's picture

Yes, well constantly bitching about the cancerous growth of government, blah blah blah, gets you a government that can't govern.  You want Wall Street to be completely free to rig everything and control everything, keep bitching about the size of government.  You'll get exactly what you deserve.

Sat, 03/28/2015 - 20:09 | 5938139 venturen
venturen's picture

easy 5 cent trade fee...per share....and none of this stupid quote bids. And a scaled tax on gains....1 day 99% tax, 1 month 90% tax, 2 months 80% tax, 3 months etc....down to 40% tax on any capital gain! why the heck is capital taxed less than WORK!!!

Sat, 03/28/2015 - 20:10 | 5938144 venturen
venturen's picture

maybe we need less money in the MARKET and more money in people pockets!

Sat, 03/28/2015 - 21:52 | 5938328 Sorry_about_Dresden
Sorry_about_Dresden's picture

The solution is obvious. Charge a tax of one-penny for every contract (100 share order) cancelled.

With billions of contracts canceled each hour those pennies would even the playing field toot sweet.

 

Volume would be halved in the firminuteute and price discovery would be discovered, remarkably, quickly.

Sun, 03/29/2015 - 14:16 | 5939494 withglee
withglee's picture

The solution is obvious. Charge a tax of one-penny for every contract (100 share order) cancelled.

That solution is "ham handed". Charging a "tax" is "never" a solution to a "regulatory" problem. Taxes are for funding services ... period. They aren't for regulation.

The best regulatory solution is removing a need for a regulatory solution. Adding a random delay to all transactions removes the need for a regulatory solution as it renders all HFT schemes impotent immediately.

Sun, 03/29/2015 - 00:55 | 5938640 cheka
cheka's picture

libya liberation complete?  libya national oil co declares..

http://www.wsj.com/articles/libyas-state-oil-company-declares-independen...

 

Sun, 03/29/2015 - 09:30 | 5938963 thecrud
thecrud's picture

The quikest way to find a solution is to make a youtube site with a vidio tutorial teach everyone in the world how to do it too.

Sun, 03/29/2015 - 13:20 | 5939355 withglee
withglee's picture
(And They Are Powerless To Fix It)

How much power does it take to add a random delay to every transaction? That renders all HFT tactics impotent.

Sun, 03/29/2015 - 14:11 | 5939482 withglee
withglee's picture

certain market participants disperse their trading activity across multiple markets in an attempt to hide various forms of market abuse, including layering, spoofing, algorithm gaming, and wash sales.

Add random transaction delay. "Poof"! Such "abuse" no longer works. Downside? There is "none"!

Mon, 03/30/2015 - 00:56 | 5940973 Grand Poobhar
Grand Poobhar's picture

HFT volumes down to 5000 trades per second (from 7000) of which only one is followed through - they can't afford to buy the regulators anymore.

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