New rules to overhaul financial market regulation across Europe finalized in the European Parliament and Council late Tuesday could dramatically reshape the trading landscape, but questions regarding certain loopholes persist.
The new rules were a response to the 2008 stock market crash caused largely by unregulated over the counter (OTC) derivatives and the 2010 “flash crash,” which was attributed to the domino effect from a large volume “fat finger” stock sell order that triggered additional high frequency trading algorithms to sell stocks, which in turn caused electronic market maker’s computer algorithms to withdraw from markets, temporarily leaving mostly sellers and few...
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