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 HFT, in which sophisticated computer programs are used to send high
volumes of orders to make markets or capitalize on price imbalances,
has been criticized by some for giving HFT firms an unfair advantage
over traditional traders.
"I'm not a fan of high frequency trading," Clark told reporters in
Calgary after the bank's annual general meeting. TD is Canada's
second-largest bank by market capitalization, with a large domestic
franchise, as well as 1,300 branches in the United States.
"I don't believe that one group of people should be advantaged in
the marketplace. I think what you're trying to do is run a market
where everyone is on a equal footing," he added.
HFT makes up more than half of the market volume in the United
States but is believed to account for a smaller portion of the
Canadian market.
Proponents of high frequency trading say the practice adds liquidity
to marketplaces and tightens spreads between bid and ask prices.
Clark said he would like to see regulators level the playing field
but said U.S. regulators must act for any changes in Canada to be
effective.
"Canada's problem is that if the U.S. doesn't deal with this issue,
it's very hard for Canada to deal with the issue, because the trades
will simply go south into the United States," he said.
"But I think it would be a good thing if the United States dealt
with the issue."
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HFT has recently gained mainstream attention with the publication of
the book "Flash Boys: A Wall Street Revolt," by Michael Lewis, which
posits the U.S. stock market is rigged in favor of high-speed firms.
Robert Greifeld, CEO of Nasdaq OMX Group, said last week that U.S.
regulators are unlikely to put rules in place that would harm high
frequency trading as doing so would make trading more difficult and
expensive for all investors.
(Reporting by Cameron French; editing by Richard Chang)
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