Post by unlawflcombatnt on Aug 5, 2009 12:40:22 GMT -6
from The Street
SEC Moves Closer to Flash Trading Ban
by Lauren Tara LaCapra
Tuesday, 8/04/09
"The government is moving closer toward eliminating a controversial trading method called "flash trading," the chairwoman of the Securities and Exchange Commission said Tuesday.
High-frequency trading has become a contentious topic because it provides select stock traders with information to make trades before the information is broadly distributed. SEC Chairwoman Mary Schapiro said she has been "concerned" by flash orders and other types of behind-the-scenes trading action called "dark pools." After a review of exchanges and electronic trading systems, she has ordered staffers to come up with a system to eliminate any competitive disadvantages....
Schapiro noted that any proposal will need to be vetted by the SEC after a public comment period.
Schapiro's statement came later in the day after a high-profile lawmaker leading the congressional charge against flash trading said he expects the commission's "imminent" approval of just such a proposal.
"The bottom line is, this practice will be eliminated," Sen. Charles Schumer (D., N.Y.) said in an emailed statement, in which he also said Schapiro had "personally assured" him in a phone call that the agency plans to ban the practice imminently.
Pre-Trade or Front Running?
Customers of Nasdaq OMX Group (NADQ Quote), Bats Global Markets, Direct Edge Holdings and the CBOE Stock Exchange can pay a fee to gain information about stock orders just milliseconds before it is distributed to users of competing platforms. NYSE Euronext (NYX Quote) does not offer a similar service, but has said it may have to if something is not done to change this competitive disadvantage.
Schumer, who holds spots on the Senate Banking Committee, the Banking, Housing and Urban Affairs Committee and the Joint Economic Committee, sent Schapiro a letter on July 24, asking her to address the issue.
Flash trading gained more attention after a Goldman Sachs...trader was arrested last month on charges of stealing trading formulas from the firm. Goldman and other market makers like Morgan Stanley..., Bank of America...and its Merrill Lynch division, Wells Fargo,...Wachovia, Credit Suisse..., Deutsche Bank... and UBS...may all need to tweak certain trading strategies to respond to a change in rules."
"tweak"??
Maybe we just need to "tweak" these firms' managment a little bit, by putting their CEOs and top officers in prison.
Isn't this roughly the same thing as insider trading?
www.thestreet.com/story/10563341/1/flash-trading-ban-is-imminent-lawmaker-says.html
SEC Moves Closer to Flash Trading Ban
by Lauren Tara LaCapra
Tuesday, 8/04/09
"The government is moving closer toward eliminating a controversial trading method called "flash trading," the chairwoman of the Securities and Exchange Commission said Tuesday.
High-frequency trading has become a contentious topic because it provides select stock traders with information to make trades before the information is broadly distributed. SEC Chairwoman Mary Schapiro said she has been "concerned" by flash orders and other types of behind-the-scenes trading action called "dark pools." After a review of exchanges and electronic trading systems, she has ordered staffers to come up with a system to eliminate any competitive disadvantages....
Schapiro noted that any proposal will need to be vetted by the SEC after a public comment period.
Schapiro's statement came later in the day after a high-profile lawmaker leading the congressional charge against flash trading said he expects the commission's "imminent" approval of just such a proposal.
"The bottom line is, this practice will be eliminated," Sen. Charles Schumer (D., N.Y.) said in an emailed statement, in which he also said Schapiro had "personally assured" him in a phone call that the agency plans to ban the practice imminently.
Pre-Trade or Front Running?
Customers of Nasdaq OMX Group (NADQ Quote), Bats Global Markets, Direct Edge Holdings and the CBOE Stock Exchange can pay a fee to gain information about stock orders just milliseconds before it is distributed to users of competing platforms. NYSE Euronext (NYX Quote) does not offer a similar service, but has said it may have to if something is not done to change this competitive disadvantage.
Schumer, who holds spots on the Senate Banking Committee, the Banking, Housing and Urban Affairs Committee and the Joint Economic Committee, sent Schapiro a letter on July 24, asking her to address the issue.
Flash trading gained more attention after a Goldman Sachs...trader was arrested last month on charges of stealing trading formulas from the firm. Goldman and other market makers like Morgan Stanley..., Bank of America...and its Merrill Lynch division, Wells Fargo,...Wachovia, Credit Suisse..., Deutsche Bank... and UBS...may all need to tweak certain trading strategies to respond to a change in rules."
"tweak"??
Maybe we just need to "tweak" these firms' managment a little bit, by putting their CEOs and top officers in prison.
Isn't this roughly the same thing as insider trading?
www.thestreet.com/story/10563341/1/flash-trading-ban-is-imminent-lawmaker-says.html