HFT shops to rise?

We noted recently over on FierceFinanceIT that a few high-tech incubators of high-frequency trading start-ups were aiming to launch more funds soon. The whole field might get a boost if new regulations ever restrict banks from proprietary trading in a meaningful way. The result would be that more banks give up their prop shops. That just might prompt some professionals to leave the cozy confines of big banks and set up their own high-frequency trading shops.

High-frequency trading already accounts for a large and increasing share of total volume. The leaders are independent proprietary firms, including the likes of Getco and Tradebot; independents account for about 46 percent of all high-frequency trading in U.S. equities, compared to 30 percent by broker-dealers, according to Aite Group, as noted by Reuters. 

The good news is that the liquidity would still be there, assuming enough start-ups make up for the loss of volume from the big banks, which shouldn't be hard. It's way too early to count on legislation passing, so it's unclear if this will ever take place. We'll likely see more start-ups anyway. 

For more:
- here's the article

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