U.S. securities regulators proposed a ban on flash orders that stock exchanges send to a select group of traders, fractions of a second before revealing them publicly.
The Securities and Exchange Commission is seeking to end the practice criticized for giving an unfair advantage to some market participants who have lightning-fast computer trading software.
Nasdaq OMX's [NDAQ 22.57 0.32 (+1.44%) ] Nasdaq Stock Market and privately held BATS Exchange recently canceled their flash services that disclosed buy and sell orders to specific trading firms before sending them to the wider market.
NYSE Euronext's [NYX 29.84 0.28 (+0.95%) ] New York Stock Exchange did not adopt the flashes under scrutiny but major alternative venue Direct Edge still offers flashes.
The SEC will put its proposal out for public comment for 60 days, and will later schedule a meeting to decide whether to adopt the proposal.
The agency said it will seek feedback on on the cost and benefits of the proposed ban, and whether the use of flash orders in options markets should be evaluated differently from those in equity markets.
The agency also tightened rules on credit rating agencies by imposing more disclosure requirements and encouraging unsolicited ratings. Those moves, and others proposed by the SEC, took aim at an industry widely criticized as having fueled the financial crisis through over-generous ratings assigned to toxic mortgage-backed securities.
The Securities and Exchange Commission is seeking to end the practice criticized for giving an unfair advantage to some market participants who have lightning-fast computer trading software.
Nasdaq OMX's [NDAQ 22.57 0.32 (+1.44%) ] Nasdaq Stock Market and privately held BATS Exchange recently canceled their flash services that disclosed buy and sell orders to specific trading firms before sending them to the wider market.
NYSE Euronext's [NYX 29.84 0.28 (+0.95%) ] New York Stock Exchange did not adopt the flashes under scrutiny but major alternative venue Direct Edge still offers flashes.
The SEC will put its proposal out for public comment for 60 days, and will later schedule a meeting to decide whether to adopt the proposal.
The agency said it will seek feedback on on the cost and benefits of the proposed ban, and whether the use of flash orders in options markets should be evaluated differently from those in equity markets.
The agency also tightened rules on credit rating agencies by imposing more disclosure requirements and encouraging unsolicited ratings. Those moves, and others proposed by the SEC, took aim at an industry widely criticized as having fueled the financial crisis through over-generous ratings assigned to toxic mortgage-backed securities.
No comments:
Post a Comment