Mr Funke Kupper said as much as two-thirds of the trades retail and institutional investors made on Chi-X were with high-frequency traders who will use their speed to buy stock first and sell it to them at a profit.

He claimed HFT accounts for less than 20 per cent on ASX, with the rest of the market trading being done by retail and institutional investors.

"Say there are 50,000 shares on offer, 40,000 on ASX and 10,000 on Chi-X. The investor tells their broker I want to buy those. The broker sends them to Chi-X first because they pay a cent less than I pay at ASX. Who is on the other side of the 10,000? About 65 per cent are HFT," he said.

"They will say they get a lot of retail, but the only people they [retail traders] will meet is HFT."

Chi-X Australia chief John Fildes has repeatedly disputed Mr Kupper's charge that it is an "HFT exchange".

"Chi-X has built a healthy trading ecosystem of retail, institutions and market makers which is delivering better execution every day, saving investors money. Chi-X attracts proportionately more retail investors than ASX through cheaper and efficient execution, allied with price improvement opportunities," said Mr Fildes.

"ASIC's oversight and continued surveillance ensures Australian equity trading has world-leading trading infrastructure and market integrity."

A spokesman for Chi-X Australia said the proportion of HFT Mr Kupper quotes is wrong, claiming "market makers" are around a quarter of the total volume of their market.

"Proportionally speaking, Chi-X has far more retail traders than ASX. The reason for that is Chi-X is a better and more-efficient platform. That means it is cheaper, faster, with an integrated order book. In short, it gives better execution," he said.

Figures on recent trading activity by Chi-X's 36 trading "participants" show global investment bank and Chi-X Global shareholder UBS was responsible for 17.6 per cent of trading and KCG – formerly Getco, which is primarily a HFT trader – was worth 9 per cent.

At the opening of ASX's new customer service centre at the site of its exchange in Gore Hill in northern Sydney, Mr Kupper said introducing competition to share trading, which accounts for just 5 per cent of ASX revenue, had only served to make the market more inefficient.

Although ASX has reduced its prices to brokers since competition was introduced, the ASX has claimed this has not benefited end investors because the extra costs that have come with it have wiped the gains out.

The Australian Securities and Investments Commission has just begun its second assessment of the level of HFT in the Australian market,  hopes to complete by the middle of the year.

Greg Yanco, ASX senior executive leader market participant supervision, said the level of HFT on Chi-X was high when it first started in October 2011. But this has been reducing as it has taken share of retail and institutional trading from ASX.

He said it is "probably" still higher than ASX now, but he stressed some HFT is good for the market and some is bad.

"There is an argument that HFT don't provide real liquidity [trading activity] because they are not taking risk overnight," he said.

"But if they are willing to stand in the market and fill your order when no one else is, then they do provide liquidity."

He said HFT can be helpful in a market if there are few people to trade with and they are providing liquidity, but once there is enough liquidity – or lots of people trading – then its ability to jump ahead of others can disadvantage those who can't move as fast.

"If someone else is there, then it is not so good. So the question is: is there value being added or extracted?"

"We think it [HFT] has dropped off on Chi-X, but it is probably still higher on Chi-X than ASX. But ASX had natural liquidity whereas Chi-X had to build that. Chi-X relied more on liquidity providers when it started, but that is changing as it gets more liquidity."

Mr Kupper disputes this, arguing HFT almost exclusively trades in the biggest and most traded stocks, where there is always enough liquidity.