Study On Legal Supervision Of High Frequency Trading

As a product of the combination of technology and finance,high-frequency trading has shown strong vitality in the capital market in recent years.It utilizes high-speed computers,complex IT systems and scientific algorithms,and its profitability has been significantly improved compared with traditional trading methods.Although high-frequency trading increases the liquidity of the market and improves market efficiency,its negative impact cannot be ignored.There have been several market disasters caused by high-frequency trading at home and abroad,such as the "Knight Capital" incident in the United States,the "Flash Crash" incident and the" Fat finger" incident of Everbright Securities and so on.Because of the transaction system,transaction costs and other reasons,the development speed of high-frequency trading in China is slower than that in foreign countries.The reulation of high-frequency trading is included in the program trading.but so far the bill has not been formally implemented and has been put on hold.With the deepening of China's financial reform and the increasing openness of the financial market,how to regulate high-frequency transactions and how to balance the relationship between regulation and financial innovation has become a difficult problem that regulators have to face.The first chapter of this article unveils the mystery of high-frequency trading From the concept,characteristics,and other transactions of high-frequency trading.the main strategies of profitability introduce the relevant situation of high-frequency trading.According to the summary,the author believes that the essence of high-frequency tradin is an emerging technical means,which coincides with programmatic trading and algorithmic trading within a certain range.The key to the profitability of high-frequency trading lies in the trading strategy.This paper ntroduces three trading strateies that are harmful to the market,namely,the trial strategy,the fraud strategy and the plug-in strategy.These three strategies can be cross-mixed and applied frequently.To manipulate the market and influence the transaction priceThe second chapter analyzes the necessity of legal supervision of high frequency trading.Firstly,it analyzes the systemic risks and technical risks of hiah-frequency trading,and its improper use will affect the fair competition in the market.Secondly.it analyzes the impact of high-frequency trading on the current regulatory concepts,regulatory laws,and regulatory technologies.The third chapter is to summarize the regulatory measures for hiah-frequency trading in overseas countries and regions.hoping to 2et inspiration fron it.The United States has a relatively early regulation of hiah-frequency trading and its regulatory experience is relatively mature.Germany has issued specific laws for the regulation of high-frequency trading.In addition.this article also introduces the regulatory measures for high-frequency trading in other countries such as the EU and Japan.Finally,according to the regulatory measures of the above countries and regions,abstract the regulatony ideas and reaulatorv tools suitable for China.The fourth chapter analyzes the status quo of legal supervision of high frequency trading in China.At present,the scale of hiah-frequency trading in China's securities market is not large,mainly because of the restrictions on China's securities market trading system.transaction costs.and trading facilities.Then it analyzes the current legislative status of China's high-trequency trading and summarizes the inadequacies of China's supervision.The fifth part is to discuss the regulatory objectives of high-frequency trading in China.The author believes that the current regulatory aoal of China should be to prevent financial risks.and then propose corresponding improvement sugzestions according to the regulatory objectives and regulatory defects.