Wednesday, April 14, 2010

SEC is considering high-frequency traders reveal their identities

(Reuters) - U.S. securities regulators are considering requiring that high-frequency traders reveal their identities and disclose their trades -- the regulator's latest attempt to get a grip on how the lightening-fast trades are shaking up equity markets.

At a meeting Wednesday, the Securities and Exchange Commission will consider proposing rules to tag high-frequency traders with ID numbers and give the SEC access to information on their trades. This would allow the SEC to analyze the fast traders' activities as well as the impact their trades have on the markets.

The SEC is already examining whether additional rules are needed to curb fast traders, or firms that use sophisticated algorithms to buy and sell stock in a fraction of a second.

The rapid trading is estimated to account for some 60 percent of all U.S. equity trading

"The need for the commission to consider monitoring these entities is heightened by the fact that large traders, including high-frequency traders, appear to be playing an increasingly prominent role in the securities markets," the SEC said in a statement.

At the same meeting, the SEC will consider proposals to ensure investors have fair access to the options markets. link

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