09:47 High-Frequency Trading comments by Charles Schwab:
Charles Schwab issues statement on high-frequency trading: 'High-frequency trading is a growing cancer that needs to be addressed'
Co's Chairman Charles Schwab and President and CEO Walt Bettinger posted the following statement on high-frequency trading at Schwab.com
"Schwab serves millions of investors and has been observing the development of high-frequency trading practices over the last few years with great concern. As we noted in an opinion piece in the Wall Street Journal last summer, high-frequency trading has run amok and is corrupting our capital market system by creating an unleveled playing field for individual investors and driving the wrong incentives for our commodity and equities exchanges. The primary principle behind our markets has always been that no one should carry an unfair advantage. That simple but fundamental principle is being broken...High-frequency trading isn't providing more efficient, liquid markets; it is a technological arms race designed to pick the pockets of legitimate market participants...A simple solution would be to establish cancellation fees to discourage the practice of quote stuffing. The SEC and CFTC floated the idea last year. It has great merit. Make the fees high enough and they will eliminate high-frequency trading entirely. But if the practice is simply a scam, as we believe it is, an even better solution is to simply make it illegal. And exchanges should be neutral in the market. They should stop the practice of selling preferential access or data feeds and eliminate order types that allow high-frequency traders to jump ahead of legitimate order flow. These are all simply tools for scamming individual investors."
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