SEC Begins Probe Of Flash Trading
*SEC IS EXAMINING FLASH ORDERS TO ENSURE FAIR ACCESS TO DATA 2009-07-30 19:04:18.188 GMT
Next up: Dark Pools (hint, hint, Mary)
Update: From Bloomberg
Charles Schumer, the third-ranking Democrat in the U.S.
Senate, told the SEC to review flash orders in a July 24 letter.
Regulators told NYSE officials they will examine them, and based
on those discussions it appears unlikely the SEC will impose
curbs on other forms of high-speed trading, Niederauer said
today in a conference call with analysts to discuss the New
York-based company’s second-quarter results.
“I don’t think there is any fear of them doing something
that would severely damage the displayed liquidity on U.S.
equity markets,” he said. “High-frequency trading is actually
the most consistent source of liquidity.”[TD: Time for one more of those "The Y in the NYSE stands for Trust" ads]
John Nester, a spokesman for the SEC, didn’t return a
telephone call seeking comment. Last month, SEC Chairman Mary
Schapiro said the agency is concerned that electronic
indications of bids and offers are being disseminated to a
select group of brokerages.
NYSE’s competitors -- Nasdaq OMX Group Inc., Bats Global
Markets, Direct Edge Holdings LLC and the CBOE Stock Exchange --
give information to their clients about orders for a fraction of
a second before the trades are routed to rival platforms. NYSE
Euronext, the world’s largest owner of stock exchanges, told the
SEC in May that these flash orders result in most investors
getting worse prices.