The Regulatory, Technology and Market ‘Dark Arts Trilogy’ of High Frequency Trading: A Research Agenda

Currie, Wendy L.; Seddon, Jonathan J. M.

doi:10.1057/s41265-016-0025-3

Cited by 17 publications

(11 citation statements)

References 56 publications

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“…There was a fifth category of articles that we labelled as ‘Others’ because they were broader in scope and did not fit with any of the research themes. These include agenda setting works, literature reviews and research opinions (e.g., Currie & Seddon, 2017; Mention, 2019). With the classification of existing works in place to assist with the identification of conceptual connections and disconnections, we performed a critical assessment of the articles to identify ‘explicit or hidden contradictions and missing explanations, and thereby identify or construct white spots or gaps’ (Boell & Cecez‐Kecmanovic, 2014, p. 267).…”

Section: Review Methodsmentioning

confidence: 99%

The strategic options of fintech platforms: An overview and research agenda

Tan

Sun

et al. 2022

Information Systems Journal

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The failure rate of fintech platforms is disproportionately high, which may be because (1) there is a lack of published knowledge on the appropriate strategies to adopt and/or (2) the traditional prescriptions for strategy may be less relevant in the context of fintech platforms. To ascertain either or both of these possibilities, we conducted a comprehensive review of the fintech literature and found that not only is there a relative paucity of research on Fintech Strategies, but there are also important limitations associated with the existing works. To address these limitations, we first identified the unique characteristics of fintech platforms and the strategic implications of those characteristics. Next, we adapted a framework made up of six conventional core logics of strategy and juxtaposed the prescriptions of those logics with the unique characteristics identified. Finally, we constructed a research agenda consisting of a number of open questions based on our analysis to provide directions for future research in this area. The agenda suggests that fintech platform strategies have to account for competing institutional logics stemming from the platforms' dual identity and the tensions between conforming for legitimacy and differentiating for competitive advantage. There is also a need to account for an exceptionally dynamic and unpredictable regulatory landscape, as well as the responses and competitive actions of influential market incumbents.

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Section: Review Methodsmentioning

confidence: 99%

The strategic options of fintech platforms: An overview and research agenda

Tan

Sun

et al. 2022

Information Systems Journal

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“…The IT artefacts in digital infrastructures create a host of new risks affecting also other stakeholders, including the risk of data loss and information privacy (Kirby, 2009;Parent and Reich, 2009;Zuboff 2020). The aftermath of the financial crisis in 2008 led to the introduction of a raft of stringent new regulations for operations within global financial institutions (Butler and O'Brien, 2019;Currie and Seddon, 2017;Mattli, 2019). The growth of such measures continues to this day, with an increasing focus on the risks posed by the digital transformation of all facets of banking as new forms of banking services have emerged, including cryptocurrencies and other FinTech innovations (European Commission, 2020).…”

Section: On the Need To Regulate Risk In It Artefactsmentioning

confidence: 99%

The regulation of and through information technology: Towards a conceptual ontology for IS research

Butler

Gozman

Lyytinen

2023

Journal of Information Technology

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This special issue addresses a largely neglected area of Information Systems (IS) research – the regulation of and through Information Technology (IT). As with other human technologies, IT artefacts present risks and can harm individuals, groups, organisations, economies, and society: However, this remains a largely unexplored topic in IS research. Nevertheless, regulators, social commentators, the media, and the public have voiced their concerns about such risks, particularly those related to artificial intelligence (AI), cybersecurity, privacy, digital assets (e.g. cryptocurrencies), and the market dominance of digital platforms. Accordingly, regulations have been instituted or proposed to regulate IT artefacts in and across several business sectors. Additionally, in response to the informational challenges posed by a complex web of laws and regulations, regulators and business organisations have implemented IT artefacts to transform regulatory and supervisory processes or to enhance organisational risk management and compliance reporting capabilities. This special issue addresses the research challenges related to emergent issues surrounding the regulation of and through IT. In this editorial, we take stock of where the field currently stands. We advance a conceptual ontology of IT regulation to guide future research by specifying several taken-for-granted core concepts. By rendering the concepts, categories, and their relationships explicit, the model and its related research questions provide a firm foundation to generate a cumulative body of research on the regulation of and through IT.

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“…Although the market impact of high frequency trading has been an active field of research in quan-titative finance [14], there is, to our knowledge, no other study that probes the effects of larger populations of high frequency traders in a given market. One should consider these results together with the means that have been proposed for high-frequency trading regulation [21]. Finally, one should consider and study from an economic perspective why larger proportions of higher frequency agents would bring larger amplitudes of both bearish and bullish market regimes.…”

Section: Impact Of Trading Frequencymentioning

confidence: 99%

Order book regulatory impact on stock market quality: a multi-agent reinforcement learning perspective

Lussange¹,

Gutkin²

2023

Preprint

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Recent technological developments have changed the fundamental ways stock markets function, bringing regulatory instances to assess the benefits of these developments. In parallel, the ongoing machine learning revolution and its multiple applications to trading can now be used to design a next generation of financial models, and thereby explore the systemic complexity of financial stock markets in new ways. We here follow on a previous groundwork, where we designed and calibrated a novel agent-based model stock market simulator, where each agent autonomously learns to trade by reinforcement learning. In this Paper, we now study the predictions of this model from a regulator's perspective. In particular, we focus on how the market quality is impacted by smaller order book tick sizes, increasingly larger metaorders, and higher trading frequencies, respectively. Under our model assumptions, we find that the market quality benefits from the latter, but not from the other two trends.Keywords agent-based model • reinforcement learning • order book • multiagent system • stock markets • regulation • high-frequency trading • tick • decimalization • metaorders • machine learning

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The Regulatory, Technology and Market ‘Dark Arts Trilogy’ of High Frequency Trading: A Research Agenda

Cited by 17 publications

References 56 publications

The strategic options of fintech platforms: An overview and research agenda

The strategic options of fintech platforms: An overview and research agenda

The regulation of and through information technology: Towards a conceptual ontology for IS research

Order book regulatory impact on stock market quality: a multi-agent reinforcement learning perspective

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