The U.S. Securities and Exchange Commission has rejected a controversial rule alter that would have allowed Cboe International Markets to set a break up-next “speed bump” in the way of an ultrafast investing strategy identified as “latency arbitrage.”
Cboe in June proposed delaying incoming executable orders on its EDGA trade so market place makers would have four milliseconds to cancel or modify their orders in reaction to market place-going info.
The proposal sought to deal with fears in excess of latency arbitrage, a strategy made use of by significant-frequency traders to execute orders on somewhat out-of-day quotes.
But amid opposition from asset professionals and electronic investing huge Citadel Securities, the SEC issued an get Friday discovering the proposal was unfairly discriminatory and Cboe had not shown it was “sufficiently tailor-made to its said objective.”
“The Exchange has not shown why a 4-millisecond delay is ample time to proficiently secure a