Europe Inks Deal Reforming Securities Markets

The new rules will curb commodity speculation and regulate new high-frequency trading technologies

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The European Union agreed to a historic overhaul of securities markets on Tuesday after three years of complex negotiations.

Included in the reform package are regulations for off-exchange dealing, commodity speculation and new technologies in high frequency trading, Bloomberg reports. Some analysts blame high-frequency trading, which uses computer algorithms to make split-second trades, for increasing volatility to a point that endangers the stability of financial markets.

Anti-poverty campaigners, who say that speculation by banks and hedge funds have been driving up food prices and exacerbating hunger, welcomed the news.

The EU Commission, the EU’s executive arm, said he new rules curbing such commodity speculation on agricultural derivatives will “contribute to orderly pricing and prevent market abuse, thus curbing speculation on commodities and the disastrous impacts it can have on the world’s poorest populations.”