Banks and dealers have called for more research into high frequency trading, warning in a letter to global watchdog the International Organisation of Securities Commissions that the impact of the controversial trading practice remains unknown.

The Association for Financial Markets in Europe, the bank trade association, and the International Derivatives and Swaps Association, the global dealer group, said in a letter to global regulatory body Iosco that efforts to clamp down on high-frequency trading must be guided by "valid and un-conflicted evidence".