Dr Christoph Boschan, Managing Director of the Stuttgart Stock Exchange, described the official draft of Germany’s proposed high-frequency trading law, published today by the Federal Ministry of Finance, as a ‘very useful initiative from the perspective of a stock exchange that focuses on private investors’. Boerse Stuttgart is pleased to note that the supervisory body’s powers are to be extended and the obligations of trading platforms and participants are specified. ‘Overall, we see this as confirmation of our own efforts in the area of self-regulation in favour of private investors. In Stuttgart we have had a restrictive approach to high-frequency trading for some time. Furthermore, it is in the interest of all financial market stakeholders that we create greater legal certainty in terms of the way we deal with high-frequency traders,’ observed Dr Boschan.
He added that a precise definition of high-frequency trading, which the German government now wishes to classify as a financial service, would remain a key issue. ‘In this context, it is important to ensure that the rules primarily cover those market participants who actually submit a huge number of orders rather than private investors, who only produce a few dozen. We are looking for a clear definition and description of different investor groups rather than a rushed piece of legislation,’ Dr Boschan concluded.