It is possible to patent a “business method,” no algorithm required [1].
Also, TFA addresses the ethics question in this case, and I don’t think it’s so obviously unethical:
> A lot of middle-class people love investing in ETFs and not paying taxes until they sell their shares, and politicians and regulators seem pretty happy to let them do it. It is also quite reasonable: People who buy ETFs pay taxes on their gains when they sell the ETFs and actually realize the gains, which feels like the right time to pay taxes, whereas people who buy mutual funds have to pay capital gains taxes at random times that have nothing to do with their own investment decisions or cash flows. From that perspective, the heartbeat trades are not an evil tax dodge but just a sensible mechanical use of the rules to achieve the logical result that everyone wants.
Also, TFA addresses the ethics question in this case, and I don’t think it’s so obviously unethical:
> A lot of middle-class people love investing in ETFs and not paying taxes until they sell their shares, and politicians and regulators seem pretty happy to let them do it. It is also quite reasonable: People who buy ETFs pay taxes on their gains when they sell the ETFs and actually realize the gains, which feels like the right time to pay taxes, whereas people who buy mutual funds have to pay capital gains taxes at random times that have nothing to do with their own investment decisions or cash flows. From that perspective, the heartbeat trades are not an evil tax dodge but just a sensible mechanical use of the rules to achieve the logical result that everyone wants.
[1] https://en.m.wikipedia.org/wiki/Business_method_patent