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Studies Indicate That High-Frequency Trading Is Beneficial to Canadian Equity Market

Canadian stock markets benefit from high-frequency trading, according to independent studies commissioned by the Investment Industry Regulatory Organization of Canada ("IIROC"). The studies analyzed the impact of rapid trading algorithms on the Canadian equity marketplace from multiple perspectives. They concluded that high-frequency trading provided more liquidity than other kinds of trading, contributed substantially to price discovery and generally improved the best price match. A few of the independent academic studies indicated higher costs for both institutional and retail clients, but the majority found that the benefits outweighed the costs.

The studies show that high-frequency trading has provided more liquidity than other kinds of trading, contributed substantially to price discovery and generally improved the best price match. A few of the independent academic studies indicated higher costs for both institutional and retail clients, but the majority found that the benefits outweighed the costs.

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