Regulators in Asia have tightened the screws on trades popular among hedge funds as stocks tumbled – an attempt to stabilize markets that some fear could ultimately stifle key strategies.
Thailand’s plan to increase controls on high-frequency trading — effective Monday — follows moves by China, which will soon subject scheduled trading to real-time monitoring. While authorities expect the moves to increase transparency, the increased scrutiny over certain transactions has raised concerns that it could tighten liquidity and make markets less attractive overall.
“The current trend of regulators tightening regulation of high frequency trading is somewhat understandable, but also concerning,” said Gary Dugan, CEO of the Global CIO Office. “HFT fund activity also brings liquidity to the markets — improved liquidity should lead to improved efficient asset pricing.”
