In response to the recent Traders Magazine article HFTs Give Thumbs Up to Proposal, Tradebot Systems’ Dave Cummings shared his thoughts on why the Large Trader rule proposal is a bad idea.
Dear Traders Magazine,
I’m sure there are people on both sides of the issue, but as one HFT I think creating a huge government database of confidential information is a horrible idea because:
They estimate it will cost $25 billion over 10 years ($4 billion startup, $2.1 billion per year for operations). This will somehow need to be paid for by investors.
"Therefore, for all SROs and members, we estimate that the total one-time aggregate cost to implement the proposed Rule would be approximately $4 billion and the total ongoing aggregate annual costs would be approximately $2.1 billion." See page 48 from the SEC Rule Proposal.
This has ‘big brother’ written all over it. How can we be sure the government will not conduct endless investigations of political enemies? Even when there are legitimate trades, the legal bills to defend yourself will be huge.
Some firms hire SEC employees for their knowledge (i.e. Elizabeth King goes to Getco). Why should they have full access to our trading strategies across all markets, and then be allowed to join a competitor?
People are hesitant to publicly criticize the SEC proposal because they fear they will become a target for harassing investigations once the database is up and running.
Dave Cummings
Chairman of the Board
Tradebot Systems, Inc.
