Reuters: Regulatory News: Knight hires global head amid regulatory change

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Knight hires global head amid regulatory change May 1st 2012, 13:40 By Luke Jeffs LONDON | Tue May 1, 2012 9:40am EDT LONDON May 1 (Reuters) - Knight Capital Group, one of the world's top high-speed trading firms, has hired Albert Maasland as its international chief, pitching the former British boss of Saxo Bank into a worsening row over tough new rules aimed at high-speed brokers. Knight Capital Europe, the European arm of the United States-based broker, said on Tuesday it had appointed Maasland in the newly created role of head of international. The appointment came eight months after Maasland stepped down as head of the British arm of Saxo Bank, the Danish online broker, to be replaced by Torben Kaaber, the former chief commercial officer at the bank. Maasland, who was a Managing Director at Deutsche Bank before joining Saxo in 2007, had been the chairman of Saxo Bank UK since the reshuffle in July last year. His appointment comes as electronic trading firms, which use powerful computers to churn out thousands of trades in fractions of a second, face planned regulations designed to curb their trading activities. The European Parliament will vote on July 9 to ratify the European Commission's controversial new regulatory proposals, including plans to slow down high-speed traders. Markus Ferber, the German centre-right lawmaker steering the reforms through the European Parliament, wants trading orders to be forced to stay in the market for at least 500 milliseconds, or half a second, before they can be cancelled. The world's fastest exchanges currently trade in less than 100 microseconds, or one ten thousandth of a second, so a resting time of 500 milliseconds would mean these trades were being slowed down by a factor of 5,000. The proposals have prompted concern among the traders who argue they are simply using technology to glean a competitive advantage, something that traders have always done. Remco Lenterman, who heads the European Principal Traders Organisation (EPTA) lobby group, said in an open latter last month: "We would be concerned by ... the introduction of minimum resting periods, which could result in a decrease in liquidity by hampering effective risk management." High-speed traders, or high-frequency trading firms, hit the headlines in May 2010, when they were blamed for the "flash crash" in the United States, when the stock market plummeted over 1,000 points, or nearly 10 percent, in a matter of minutes. The fall was initially caused by one large erroneous trade from a funds firm, but the losses were rapidly magnified when computer-driven high-frequency traders followed the move down. Link this Share this Digg this Email Reprints

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