BaFin Updates HFT Legislation Guidance

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BaFin, the German financial regulator, updated guidance on its website in clarification of several issues concerning the Hochfrequenzhandelsgesetz (High Frequency Trading Act) which came into force on May 15. The Act introduces authorisation and organisational requirements intended to mitigate the potential risks arising from the speed and complexity of algorithmic high-frequency trading methods which make up some 40 per cent of exchange trades in Germany.

The updated guidance seeks to clarify issues including:

  • licensing requirements;
  • transitioning requirements;
  • definition of HFT; and
  • date of effectiveness.

The BaFin FAQ webpage (in English) is available here.