Industry superannuation funds are calling for reforms to better protect investors against high-frequency trading, which they say costs investors $1.5 billion annually, according to The Australian Financial Review.
The Industry Super Network, which represents large industry retirement funds, decried the corporate regulator's recent decision to not introduce “speed limits” on small trades, which had been intended to limit high-frequency traders who account for 25 per cent or more of all trades on the sharemarket.
The group said the speed of high-frequency trading prevents normal investors from participating in the 25 per cent of trades their activity accounts for, costing an estimated $1.5 billion annually in lost potential opportunities.
“A market system that caters to speed, rather than capital allocation, creates an uneven playing field and gives traders whose strategies are based on speed an advantage and a leg up,” Industry Super Network head of policy Zachary May said, according to the AFR.
“There is no disclosure of high-frequency traders' profits and no transparency about who is behind the trades in the market.”