Future impact of technology on financial markets to be investigated in UK

25 November 2010

Financial technology which can enable practices such as high frequency trading is to be investigated by scientists in the UK to assess their potential impact on the markets.

According to the British government, the Government Office for Science is to conduct the analysis to assess both the benefits and the concerns raised by the adoption of new technology within the financial services sector.

Areas to be covered by the review other than high frequency trading include financial market integrity, transaction costs surrounding finance access and the future role of capital markets, the department explained.

Professor Sir John Beddington, government chief scientific adviser and leader of the study, said: “It's essential to develop a better understanding of how computer trading in financial markets might evolve, in order to help protect the UK and other economies against technology-led economic instabilities.

“This timely and important investigation will have important findings not only for the UK economy but worldwide. I am delighted that the Financial Secretary to the Treasury Mark Hoban has agreed to be the sponsoring minister for this project and I look forward to working with him.”

Statistics cited by the government showed that more than a third of equity trading volumes in the UK are accounted for by high frequency computer trading.

By Jim Ottewill

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