On May 6, 2010, the Dow Jones Industrial Average (DJIA), a broad stock index, fell by nearly 1,000 points over the course of several minutes and then quickly rebounded. This was one of the largest intraday declines in the history of the DJIA and was described by one commentator as "one of those eye-opening events that exposed many flaws in the structure of the market." Dubbed the Flash Crash , the event led to several analytical studies and reports and to greater scrutiny of a broad trading protocol known as high-frequency trading (HFT), a form of algorithmic securities trading, which has no formal consensus definition. In addition to the heightened scrutiny it received after the Flash Crash, HFT, which accounts for a large share of total domestic securities trades, has raised other public policy concerns. Among them are whether (1) HTF plays a role in exacerbating market fragility; (2) it may heighten the market's systemic risk; (3) it enhances or harms the quality of the securities market; (4) certain kinds of HFT may constitute an illegal form of front-running; (5) HFT helps foster a system of two-tiered trading markets that benefits certain traders at the expense of others due to their access to faster trading data and advantageous trade infrastructure; and (6) the presence of HFT has been to the detriment of non-HFT investors and investor confidence in the securities market. As in earlier major market disruptions, such as the October 1987 market crash (when the DJIA lost almost 22% in a single day, setting off a global stock market decline), congressional interest in the Flash Crash derives in part from Congress's decades-old legislative mandate that, among other things, delegated to the Securities and Exchange Commission (SEC) responsibility for investor protection (through a regime of mandatory disclosure) and maintaining fair and orderly markets. In the 113 th Congress, congressional interest in HFT has been reflected in legislation that would levy securities transaction taxes on securities trades, presumably raising the cost and thus reducing the incidence of conducting HFT. Specifically, in the 113 th Congress, S. 410 (Harkin), H.R. 880 (DeFazio), and H.R. 1579 (Ellison) would levy taxes on various financial trades, including trades conducted by HFT traders. H.R. 2292 (Markey) would require the Commodity Futures Trading Commission (CFTC) to provide a regulatory definition of HFT in the derivatives markets that the agency oversees. It would also require high-frequency traders in derivatives to register with the CFTC, submit semiannual reports to the agency, and conform to business conduct requirements that the CFTC may issue. H.R. 2292 would also grant the CFTC the authority to impose civil penalties under the Commodity Exchange Act for violations of a HFT regulation. The amount of the fine would be based on the duration of the violation. In addition, in exercising congressional oversight authority over the SEC and the CFTC, a number of committee and subcommittee hearings have touched on the subjects of HFT and the Flash Crash. Meanwhile, the CFTC and the SEC, which respectively regulate derivatives and equities, have both issued studies that provide far-reaching explorations of HFT. The studies also pose a number of questions about the value of HFT and propose several ways to further regulate it or intervene to mitigate consequences of HFT that some consider to be problematic. Interest in HFT has also been heightened by the release of the book Flash Boys by Michael Lewis and its offshoots, including an interview with the author on 60 Minutes and an adaptation of the book in the New York Times . Among other things, a former securities trader at the Canadian brokerage firm RBC charges that the HFT firms on which Lewis reports have significantly relied on a form of "legalized front-running" and observes that many major institutional investors, including various mutual funds, appear to have been unaware of the existence of such behavior, which could allegedly be costly to them. The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), CFTC, SEC, New York Attorney General, and Massachusetts Secretary of Commerce are variously conducting investigations and probes into specific HFT firms, certain HFT strategies, and HFT in general. Specifically, Attorney General Eric Holder has announced that the DOJ is "investigating [HFT] … to determine whether it violates insider trading laws." In addition, the FBI is reportedly probing (1) whether HFT firms are trading ahead of other investors based on information that other market participants cannot see, a possible form of front-running, a type of illegal insider trading; (2) practices in which a HFT trader submits trade orders and then cancels them to foster the illusion of market activity, a possible form of market manipulation that may prompt others to respond to illusory trade orders; and (3) the use of HFT to place orders to hide transactions that may be based on an illegal tip. To facilitate these probes, the agency has reportedly openly solicited traders and stock-exchange workers to divulge any evidence suggesting front-running and manipulation. These inquiries reportedly derive from a multiyear agency probe of illegal insider trading, an effort that reportedly has led to at least 79 convictions of hedge-fund traders and others. The New York Attorney General is responsible for enforcing the state's Martin Act, a securities law that dates back to the 19 th century, which gives the Attorney General statutory powers "to conduct investigations of suspected fraud in the offer, sale or purchase of securities [and] [w]here appropriate… [to] commence civil and criminal prosecutions … to protect investors." Under the act's auspices, New York Attorney General Eric Schneiderman has opened an investigation into whether stock exchanges provide HFT firms with improper advantages, including accepting payment to locate HFT firm computer servers within an exchange's data center. The Attorney General has also struck deals with several entities, including Business Wire and Marketwired, that for a fee provided potentially market moving news releases to HFT traders in advance of public release. The entities agreed to suspend the advance news feeds. Reports also indicate that the Attorney General has subpoenaed several HFT firms as he investigates whether certain traders have an unfair advantage over others. In the class action civil case City of Providence, Rhode Island v. BATS Global Markets Incorporated et al. (U.S. District Court, Southern District of New York, No. 14-2811), the city of Providence is suing BATS Global Markets Incorporated, the Chicago Board Options Exchange, NASDAQ OMX Group, the New York Stock Exchange, and others for engaging in fraud designed to manipulate the markets. The suit alleges that the fraud was conducted in conjunction with several brokerage firms and several HFT firms and that it resulted in the diversion of "billions of dollars annually from buyers and sellers of securities to themselves." The suit is being brought by the city of Providence on behalf of investors that acquired securities in the United States after April 2009. The civil case's allegation that HFT has resulted in the diversion of billions of dollars from investors to a collective of market centers, brokerage firms, and HFT firms is not unlike a commonly heard characterization that HFT "is not trading—it is skimming … [or] legalized theft [that constitutes] ... a tax on investors." Media reports also indicate that William F. Galvin, the Massachusetts Secretary of Commerce, has sent inquiries to investment advisers and private equity and hedge-fund firms in which he requested answers to a number of questions related to their HFT practices, including their use of direct data feeds from exchanges and whether they have a computer server located within an exchange's data center. Spokespersons have reportedly said that the inquiries are a way to learn about "the extent of the [HFT] practices." SEC officials report that the agency is involved in "a number of ongoing investigations regarding various market integrity and structure issues, including high-frequency traders and automated trading." In June 2014, SEC Chair Mary Jo White made what was arguably the first explicit agency discussion of prospective HFT-related regulatory initiatives. In the speech, which included a number of potential market structure regulatory reforms, White praised the benefits brought by algorithmic trading and electronic trading, such as the reduction of investor trading costs. Referencing HFT, however, she said she had concerns with "aggressive, destabilizing trading strategies in vulnerable market conditions." Such concerns over HFT, she indicated, had prompted her to direct SEC staff to develop recommendations for "an anti-disruptive trading rule" that would "apply to active proprietary traders in short time periods when liquidity is most vulnerable and the risk of price disruption caused by aggressive short-term trading strategies is highest"; clarify "the status of unregistered active proprietary traders to subject them to... [SEC] rules as dealers" and look into crafting "a rule eliminating an exception from ... [Financial Industry Regulatory Authority] membership requirements for dealers that trade in off-exchange venue"; and prepare recommendations for the SEC "to improve firms' risk management of trading algorithms and to enhance regulatory oversight over their use." The SEC Chair also stated that the agency needed to explore whether "low-latency tools … tend to advantage certain types of proprietary trading strategies that may detract from the interests of investors." At present, the CFTC appears to be deliberating whether additional regulatory intervention has merit and, if so, what form that intervention might take. CFTC officials have reportedly said the agency is responding to concerns brought to it about certain potentially abusive HFT practices and investigating whether these practices meet the definition of market manipulation under the federal securities laws that the CFTC enforces. This report provides an overview of equities HFT and its potential economic and regulatory implications.