💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

EXCLUSIVE-UPDATE 1-Getco's European chief steps down

Published 01/17/2011, 12:23 PM
Updated 01/17/2011, 12:28 PM

* European chief executive steps down after six years

* The firm launched a European dark pool in June

* Commission plans to clamp down on HFTs and dark pools

(Updates with background on regulatory proposals)

By Luke Jeffs

LONDON, Jan 17 (Reuters) - The European head of electronic trading firm Getco, James Faraci, has left his post at a time when European regulators aim to clamp down on the region's high-frequency trading firms (HFTs). Faraci stepped down as the chief executive of Getco Europe Limited on Dec. 15 after six years in the role, according to the Financial Services Authority register.

In mid-December he also gave up his responsibility as the British regulator's designated representative of Getco Execution Services Ltd, the firm's dark pool which went live last June.

Faraci's duties as the head of the London office will be shared among Getco's European senior managers John Mueller and Stephen Warr, according to two sources close to the firm, while Faraci is looking for new opportunities within the group.

Getco spokeswoman Sophie Sohn said on Monday that Faraci was still with the firm but declined to comment further.

Faraci stepped down just days after the European Commission issued a consultation paper on Dec. 8 that proposed radical rule changes for European trading firms, including HFTs and dark pool providers.

The Commission has given the region's main trading entities until Feb. 2 to provide feedback on its plans, which include the introduction of circuit breakers that limit the amount of trading to ensure the resilience of the market.

The regulator also outlined reforms aimed at trading firms' secretive dark pool systems, and said there was a "need to set clear boundaries for dark pool trading".

Getco is regulated by the FSA as a "full scope" firm which already puts it among the most scrutinised trading firms in London. But the EC's proposals could have serious implications for less tightly regulated firms.

HFT has grown rapidly in Europe over the past three years with the emergence of fast, cheap trading platforms, such as Chi-X Europe and Bats Europe, that make the high volume, low margin trading strategies commercially viable.

Trading consultancy Aite Group published a report last year that predicted HFT would account for almost a half of European equity trading by the end of 2012, up from 25 percent a year ago. But HFT firms have been criticised by politicians for their short-term approach to share ownership.

HFTs have argued in their defence that they are trading within the rules set by regulators and provide much-needed liquidity which benefits all trading firms.

Dark pools, also known as broker crossing networks, have been attacked by Europe's stock markets which claim the pools perform the same function as exchanges but benefit from being less tightly regulated.

The dark pool operators have countered that they are already well-regulated under their banking licences and that their dark pools are too small to warrant special treatment from regulators.

(Editing by Dan Lalor and David Cowell)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.