Australian regulators may resurrect the idea of a 500 millisecond hold on trades in order to curb high-frequency trading.
An Australian Securities and Investment Commission taskforce established in mid-2012 had recommended implementing a pause of 500 milliseconds for small orders of $500 or less but the report was shelved.
“If people can’t have trust and confidence in the market, then you don’t have a market,” ASIC chairman Greg Medcraft told The Australian Financial Review. “The strength of the market is reflected in how many retail investors you have. If you discourage real buyers, then markets become trading for trading’s sake, rather than serving the real economy.”
To me, this is an idea with legs. Of course, the best planned solution often cause more problems than what they aimed to fix.