Whitepaper: Trading and Smarter Latency

Introduction

Trading systems are becoming increasingly fast, complex and interconnected. The US market crash of May 6th 2010, also known as the „Flash Crash‟, was swift, deep and propagated to all open markets and asset classes. Fortunately, both the Asian and European Markets were closed. However, market participants are not the only stakeholders concerned by the current situation; it is now the politicians and public that demands an explanation and regulatory reform.

The current e-trading landscape is the result of 20 years of accelerated technology progress and antiquated regulatory framework, which does not take into account the modern realities of the market, where speed is the main leitmotiv. This paper will examine the impact of technology change; circumstances and challenges created by latency, the shortcomings of regulatory technology, and discuss a new approach to latency.