There are exchanges that operate with similar rules, like POSIT. http://www.itg.com/product/posit-3/ But the slowness is a lot more, executing a few times a day. And you can't change your order AFAIK (and there's large random timespans). There's also complications to avoid revealing how big the buy or sell side are.
As far as your suggestion, that's what I was thinking for a while when I first read about them. I don't think it works. Simply cutting over every minute doesn't help, since there'd be a race near the edge. Like eBay, there's zero point in submitting a bid until the very last (milli|micro|nano)second.
It also doesn't work because other exchanges exist. For instance, suppose the interval is an hour. You submit at 0:01, then by 0:30 the price has moved on other exchanges. Obviously you'll want to change your order, and you still have time. But the price is changing on other marketplaces every nanosecond, so you're going to be changing your bids right up until 0:59.999999. Once you allow changing the order, you're back to racing.
If this was the only exchange type, and they all were synchronized, it might work a bit better. But you'd run into another issue: no one would submit an order until the very last microsecond, to use all available information. There's probably more complications too; I don't really know anything about this stuff.
HFT isn't a bad thing, or at least, I've not heard why it's actually bad. Other than runaway programs screwing things up. Which, I think is actually great. That big flash crash was fucking hilarious. People had sell orders in at 0.01 or market or whatever, and they executed, then they got all upset that things worked like they should!
HFT is only a bad thing, because it's removes bright minds from working on other problems; not because it hurts other market participants (which it doesn't---apart from being competition to other market makers).
I've read some interesting proposal that removing the subpenny rule would make speed less of a concern, since it would be possible to undercut on price instead.
As far as your suggestion, that's what I was thinking for a while when I first read about them. I don't think it works. Simply cutting over every minute doesn't help, since there'd be a race near the edge. Like eBay, there's zero point in submitting a bid until the very last (milli|micro|nano)second.
It also doesn't work because other exchanges exist. For instance, suppose the interval is an hour. You submit at 0:01, then by 0:30 the price has moved on other exchanges. Obviously you'll want to change your order, and you still have time. But the price is changing on other marketplaces every nanosecond, so you're going to be changing your bids right up until 0:59.999999. Once you allow changing the order, you're back to racing.
If this was the only exchange type, and they all were synchronized, it might work a bit better. But you'd run into another issue: no one would submit an order until the very last microsecond, to use all available information. There's probably more complications too; I don't really know anything about this stuff.
HFT isn't a bad thing, or at least, I've not heard why it's actually bad. Other than runaway programs screwing things up. Which, I think is actually great. That big flash crash was fucking hilarious. People had sell orders in at 0.01 or market or whatever, and they executed, then they got all upset that things worked like they should!