High-frequency trading is major a conundrum for many market experts and regulators as they seek to gauge its true impact on how equity markets function. But if you believe the traders cited in Michael Lewis’ book Flash Boys, HFT is putting a lot of investors at a big disadvantage. The reality is, HFT has been around for years – and it’s become big business as more and more new HFT firms come into the marketplace. The business of HFT is the subject of a new paper from the Bank of Canada which looks how competition between new HFT firms and incumbents struggling to maintain profitability could be affecting markets. As HFT firms proliferate how do factors like their behaviour and business model impact the integrity of equity markets? It’s the kind of thinking policymakers should be doing. You can download the full paper here for free.