Modern Markets Initiative

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Modern Markets Initiative
Modern markets Initiative.jpg
Founded 2013
Headquarters Washington, DC
Products Advocacy and education for automated trading firms
Key People Kirsten Wegner, CEO; Bill Harts, Senior Adviser
Twitter ID @ModernMarkets
Web site http://modernmarketsinitiative.org/

The Modern Markets Initiative is a Washington, DC-based advocacy group for quantitative traders, founded in 2013 by four high frequency trading firms: [1]

  • Tower Research Capital
  • Hudson River Trading
  • Quantlab Financial
  • Global Trading Systems

History

MMI was formed by a group of high-frequency traders to counter what they felt was the unfair reputation of high speed trading as a disruptive force in the markets. The group hired the political strategists Kevin Madden and Erik Smith to press their case with regulators and lawmakers.[2] The group also hired Peter Nabicht, former chief technology officer for Allston Trading, to be their spokesman.

In August 2014, MMI announced that former CFTC commissioner and frequent HFT critic Bart Chilton and DLA Piper, the law firm for which Chilton served as senior policy advisor, would work with MMI on policy matters.[3]

The high-speed trading sector came under heightened scrutiny from the CFTC and the SEC in after the "flash crash" in May of 2010. Calls for action increased again after Knight Capital Group suffered “a technology issue” that affected the routing of trades on around 150 stocks on the New York Stock Exchange and cost the firm $440 million. [4]

In March 2014, New York Attorney General Eric Schneiderman announced an investigation into HFT which he said gives such firms "unfair advantages that give them early access to key data."[5] Two weeks later, Michael Lewis's book "Flash Boys", which highlighted the tactics and profits of HFT, ignited controversy about such trade practices and, in a segment on CBS News' 60 Minutes program, Lewis called the U.S. stock market "rigged." [6]

Proponents of high-speed trading strategies claim they are simply reacting to market information in a manner similar to the way trading firms have traditionally reacted to market information, only much more quickly.[7]

Key People

References

  1. High-Speed Traders Form Trade Group to Press Case. WSJ.com.
  2. High frequency trading lobbyists stand ready to spend BIG. CNBC.
  3. High-frequency trading critic Chilton joins HFT lobby effort. CNBC.
  4. Knight Capital shares sink after algorithm glitch. MarketWatch.
  5. New York's Schneiderman seeks curbs on high-frequency traders. Reuters.
  6. Michael Lewis Explains His New Book "Flash Boys". CBS News.
  7. How speed traders are changing Wall Street. CBS News.