The Australian Securities Exchange (ASX) is confident the Government and the Australian Securities and Investments Commission (ASIC) can resolve high frequency trading issues within six months, ASX managing director and chief executive Elmer Funke Kupper said.
Speaking at the Association of Superannuation Funds of Australia (ASFA) national conference in Sydney, Kupper said introducing competition into the Australian market had increased high frequency trading, dark pools and arbitrage opportunities because the business models of the new exchanges tended to align better with high frequency traders.
"You may not be surprised to learn some of the high frequency trading firms and investment banks own stakes in the high frequency exchanges," he said.
The Minister for Superannuation, Bill Shorten, and ASIC were on top of the issue, he said, and would avoid many of the dangerous practices and negatives consequences that had occurred in the United States, according to Kupper.
He said the ASX had recognised and started to respond to the issue years ago and would continue to lobby the industry.
"As an exchange we can't sit still and rely on regulators to make sure that the world will be okay for us and for you," he said.
ASFA has been instrumental in lobbying the Government for changes to the marketplace to limit the effects of high frequency trading.