TD’s CEO Says ‘Not a Big Fan’ of High-Frequency Trading

Toronto-Dominion Bank Chief Executive Officer Ed Clark said he’s “not a big fan” of high-frequency trading and that the U.S. should act to ensure fairness.

“There’s something deeply disturbing about giving people de facto preferential access in the marketplace,” Clark, 66, said today in an interview after the lender’s annual investors’ meeting in Calgary. “It has been a drug that these exchanges have got on that isn’t actually good.”

Scrutiny of high-frequency trading is intensifying, while public attention surged with this week’s publication of Michael Lewis’s book, “Flash Boys.” High-frequency trading involves software-driven strategies that usually employ super-fast computers to post and cancel orders at rates measured in thousandths or even millionths of a second.

“These high-frequency traders don’t actually provide real liquidity, but they get paid as if they do,” said Clark, head of Canada’s largest lender by assets.

As long as the U.S. continues to allow high-frequency trading, it’ll be difficult for Canada to take a different position, Clark said, because any action would result in “a significant portion” of trades moving to the U.S.

“We really do need the U.S. to take some leadership on this, and I hope they do,” said Clark, adding that the Toronto-based bank isn’t involved with high-frequency trading.

“We’re not in that game,” he said.

U.S. Investigations

While Lewis sees exploitation rampant among the more than 50 public and private venues that make up the American stock market, his thesis has drawn rebuttals from executives such as Bill O’Brien, the president of exchange operator Bats Global Markets Inc.

The Securities and Exchange Commission is investigating high-frequency and automated trading, Chairwoman Mary Jo White told lawmakers April 1. The Federal Bureau of Investigation is soliciting traders and stock-exchange workers to blow the whistle on possible front-running and manipulation via high-speed computers.

The discussion around high-frequency trading is healthy, Bank of Montreal (BMO) CEO William Downe said in an April 1 interview.

“The market response is going to be to make adjustments to squeeze out the advantage that high-frequency traders have, because it would seem to be unfair to other market participants,” Downe, 62, said.

To contact the reporter on this story: Doug Alexander in Toronto at

To contact the editors responsible for this story: Peter Eichenbaum at; David Scanlan at Steven Crabill, Dan Reichl

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