Algo trading probe urged following turbulence in stock markets

Lord Myners, a former fund manager and financial services minister, has called for an investigation into the practice of high frequency stock market trading (HFT), which he says may have exacerbated recent swings in share value.

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Lord Myners, a former fund manager and financial services minister, has called for an investigation into the practice of high frequency stock market trading (HFT), which he says may have exacerbated recent swings in share value.

So-called ‘black box’ or algorithmic trading relies on super-fast computers to make thousands of transaction per second with the aim of exploiting short-term opportunities on the market.

Myners told the Daily Telegraph newspaper that the Treasury and the Financial Services Authority (FSA) ought to investigate whether the practice added to market turmoil that saw billions of pounds wiped of the value of British companies in recent weeks.

“High frequency trading appears so detached from the true function of capital markets, but is potentially fraught with hazard,” Myners is quoted as saying.

“It definitely deserves more attention than either the FSA or the Treasury has given it.”