Paradigm Shifts & Unintended Consequences: The Death of the Specialist, the Rise of High Frequency Trading, & the Problem of Duty-Free Liquidity in Equity Markets

47 Pages Posted: 12 Apr 2013 Last revised: 30 Jul 2014

See all articles by Jennifer Victoria Christine Dean

Jennifer Victoria Christine Dean

Florida Atlantic University; New York University - Gallatin School of Individualized Study

Date Written: May 2013

Abstract

An exploration of the implications of government mandated economic policies and resultant fragmentation of the U.S. equities markets. This article begins with an historical framework presenting the structural market changes that inadvertently led to a near collapse of well established and time-tested mechanisms for protecting the integrity of equity markets. The article continues by discussing the problems inherent in the disconnect between lawmakers and equity market participants. Next, issues regarding the disparity between legislative intent and the actual subsequent result of that legislation when implemented are discussed. Finally, potential solutions to this paradoxical outcome are presented for consideration.

Keywords: NYSE, High Frequency Trading, Specialist, Market Makers, Equity Markets, Electronic Trading

Suggested Citation

Dean, Jennifer Victoria Christine, Paradigm Shifts & Unintended Consequences: The Death of the Specialist, the Rise of High Frequency Trading, & the Problem of Duty-Free Liquidity in Equity Markets (May 2013). Florida International University Legal Studies Research Paper; No. 13-05. Available at SSRN: https://ssrn.com/abstract=2249294 or http://dx.doi.org/10.2139/ssrn.2249294

Jennifer Victoria Christine Dean (Contact Author)

Florida Atlantic University ( email )

Boca Raton, FL 33431
United States

New York University - Gallatin School of Individualized Study ( email )

New York, NY
United States

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