* European regulation on HFT well ahead of U.S. rules
* Deutsche Boerse already fulfils German HFT rules
* Sees little impact of Europe transaction tax on group
* No plans to issue convertible bonds at moment
(Adds CFO comment, background)
FRANKFURT, April 29 Deutsche Boerse
expects a renewed focus by regulators on high frequency trading
(HFT) will have little effect on its business, the company's
chief financial officer said on Tuesday.
"There will be further discussion on it but for our business
we don't think we are negatively impacted," Gregor Pottmeyer
told a conference call with analysts, a day after the German
exchange operator released first quarter earnings that showed
HFT is a practice carried out by many hedge funds, banks and
proprietary firms using sophisticated computer programs to send
high volumes of orders at near light speed, executing short-term
trades to make markets or capitalize on price imbalances. HFT
makes up more than half of all U.S. trading volume.
Some U.S. regulators have said high frequency traders enjoy
unfair technological advantages, with stock exchanges giving
them early access to key data, and need to be curbed.
Regulators' focus on HFT has been piqued by Michael Lewis'
new book "Flash Boys: A Wall Street Revolt," which argues that
markets are rigged in favour of high-frequency traders, who use
their speed to "legally front-run" other investors.
Pottmeyer played down the importance of the issue for
Deutsche Boerse, pointing out that the U.S. equity market is
much more fragmented than in Europe and that safety measures,
such as volatility interruption, have existed in Europe for
"The regulation in Europe is really far ahead compared with
the United States," Pottmeyer said, adding that Deutsche Boerse
already fulfilled Germany's HFT requirements, which were
approved last year.
"We already put many measures in place and feel we are fine
with this development," he said.
Similarly, plans in Europe to introduce a tax on financial
transactions would most likely affect equity transactions, which
would not have a material impact on Deutsche Boerse, Pottmeyer
Earlier, Pottmeyer said Deutsche Boerse has no plans at this
stage to issue convertible bonds, which can be transformed into
equity capital, although it has asked its shareholders for
permission to do so as a potential financing alternative.
Deutsche Boerse holds its annual meeting of shareholders on
(Reporting by Jonathan Gould; editing by Thomas Atkins and