I'd make it five minutes. If HFTs want to claim adding liquidity as legitimate value they're offering to the market, let them add it in a way that human decision-makers thinking about fundamentals can benefit from, rather than just gaming the way the market clears and scalping imminent trades. It's not as if the true value of a company can change faster than that.
You bet your bottom dollar it can. Have you ever seen activity on the CME when the non farm payroll numbers are published? Five minutes might as well be all week.
That's just the market converging on current reality, which changed gradually over the course of weeks. A company can't change its fundamentals (the goods and services it offers) continually in fractions of a second, so any such price fluctuations are noise rather than signal, and we shouldn't be using a system which amplifies and reacts to that.
A company can't change it's fundamentals, no, but the market it operates in can change in seconds. A major disaster, announcement of a government policy, or new economic information can become available that instantly changes the fate of a company, or even a whole industry. You really want to make laws that stop people acting on information? Good luck with that.
