New FINRA Measures Proposed to Regulate High-Speed Trading – 22nd Sept 2014
Developers of high-speed trading algorithms would have to register with regulatory authorities and alternative trading systems would have to disclose their trading volume under new market-structure reform proposals by the Financial Industry Regulatory Authority. The proposals follow a meeting by FINRA’s board on Friday. They come after SEC chairman Mary Jo White rolled out the SEC’s initiatives for regulating high speed trading. High frequency traders use computer algorithms and sophisticated technology to buy and sell shares at fractions of a second. Concern about their practices intensified during the May 6, 2010 “flash crash” when futures and securities indices plunged by more than 5 percent before rebounding. High-speed traders faced more scrutiny when influential author Michael Lewis, author of Flash Boys: A Wall Street Revolt, accused the firms of using their trading strategies to manipulate stock prices.
Source – Complinet