"Don't tax you, don't tax me, tax that fellow behind the tree!"
-Senator Russell Long (D) LA
An FTT or Robin Hood tax would pretty much end HFT.
Which confuses me because I thought HFT would end because it is a fraud upon the market (at least the quote-stuffing variant is)
From a January 2011 post "Fighting Fire With Fire: Beating the High Frequency Traders at Their OwnGame":
HT: The Market Ticker who headlines his post
"Your Bazooka? It's Up Your Butt. Go Ahead And Fire." and goes on to mention one of my favorite bits o'securities law:
...Look folks, this is simple: Section 9 of the Securities Act of 1934 makes it unlawful for any person to create a false and misleading appearance of trade, or to influence a price, or to induce the purchase or sale of securities by others....The '34 act is known as the "Exchange Act" among the cognescenti, to distinguish it from the act of '33.That quibble aside, Mr. Denninger could be proposing the SEC Attorney Full Employment Plan of 2011.And it uses existing law.No need for the SECAFE Act of 2011.
By-the-bye this has nothing to do with flash crashes, it's just straight up manipulation, know what I'm sayin?
Here's Forbes from last October:
Here's Forbes from last October:
A Tax to Kill High Frequency Trading
The United States should adopt a financial transactions tax (FTT) to kill high frequency trading (HFT) by removing the juice from this pernicious practice. A tax would be a simpler, more direct approach than entrusting the SEC to make effective rules....MORE
Finally, the latest from Europe via the New York Times:
We have a bunch of studies on exactly what an FTT does to the HFT's, I'll see if I can dig them up.A hotly contested tax on financial trades took a major step forward on Tuesday when European Union finance ministers allowed a vanguard of member states to proceed with the plan.The so-called Robin Hood tax would apply a levy to trading in stocks, bonds and derivatives, complex financial products tied to underlying assets like oil prices or interest rates. Although the tax would probably be small — one-tenth of a percentage point or less on the value of a trade — it could earn billions of euros for cash-strapped European governments.
Algirdas Semeta, the European commissioner in charge of tax policy, called the decision “a major milestone in tax history” and said the levy could be imposed from next year. But deep concerns about how the initiative would work in practice still could mean delays.
The European Commission, the Union’s policy-making arm, will still need to draft the final legislation and the states in favor of the law will have to give their unanimous approval before it becomes law in the eleven countries that have agreed to send the proposal forward — two more than the minimum required for legislation to be drafted.
A significant complication is stiff opposition to the tax by Britain, which has the largest trading hub in Europe in the City of London. But because Britain has decided to stay outside the group of states applying the tax, its resistance probably would not stop the plan from moving ahead....
