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SEC Votes Unanimously To Ban Flash Trading, Seek Public Comment
From Bloomberg:
Sept. 17 (Bloomberg) -- The U.S. Securities and Exchange Commission proposed banning flash orders after lawmakers said the practice may give hedge funds an advantage over other investors.
SEC commissioners unanimously voted today Ao seek public comment on a rule barring exchanges and trading platforms from giving clients access to information about stock orders a fraction of a second before the market.
“Investors that have access only to information displayed as public quotes may be harmed if market participants are able to flash orders and avoid the need to make the orders publicly available,” Chairman Mary Schapiro said.
Democratic Senators Charles Schumer and Ted Kaufman urged the commission to halt the practice, arguing frequent traders use technology to profit from access to information not available to retail investors. Direct Edge Holdings LLC has relied on flash orders to take market share from NYSE Euronext.
Nasdaq OMX Group Inc. and Bats Global Markets voluntarily dropped flash orders last month after the practice drew scrutiny from Congress and the SEC.
The SEC’s proposed ban requires a second vote at a later public meeting to become binding.
*****
And here is Senator Kaufman's statement on the Flash Ban issued earlier:
“I commend the SEC for its proposal to ban flash orders. Let’s not forget, however, that this occurred only after public exposure of the SEC’s previous okay of flash orders. Flash orders may be a symptom of a much larger problem. Now the SEC must examine the rest of the iceberg. I’m pleased that the SEC has begun a comprehensive review of market structure issues, and I look forward to that process.
“The credibility of the U.S. financial markets is essential. For investors to have confidence, the SEC must ensure that high frequency trading, dark pools, potential conflicts of interest and other market structure issues are not undermining the interests of long-term investors.”
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A large part of this "good start" was due to one person who decided to make this his cause.
It proves that one man with an intelligent voice, and a blog can make a difference (imho, a big difference).
Keep up the excellent work, Tyler.
Yes, but I have this nagging thought...what if this is all misdirection? What if Zero Hedge is the alter ego of none other than GS/JPM/USgov et al? Created to spread disinformation and manufacture counter parties to this melt-up. What better metaphor than Tyler Durden to mockingly hide in plain sight? Post just enough information to incubate an organically grown wall of worry, then trounce all over it. I mean how can so many smart and resourceful people be on the wrong side of the market for so long? ...just a thought.
with such glorious music? come on McLuvin, do what your good at - go pimp us a case of brewskies and some Goldschlager and meet us at the party. Its a valid question though. Polite, not friendly is a good attitude to maintain these days.
Man is that quadruple reverse logic or what?
Who woulda thunk it, Tyler Durden is the Vampire Squid!
Just in time for Fright Night!
GOOD NEWS INDEED! Many thanks from a much smaller 401k!
Well, technically, I think "TD" has "multiple personalities." Just saying. Anywho, way to go crew. And, yes, McLuvin proves that there are some deep thinkers among us. Rember, paranoia is a defense mechanism for survival.
1 small step in the right direction.
TYLER & Staff / Have you considered putting forth another "Vote Yes" or support Senate Bill S.604 "Audit the Fed" so we can show some solidarity that can be sent to the "other" 75 non supporting members of the bill??? Thanks for your consideration. I know it's a lot of work...
Asked the same question...nothing can change unless this issue is addressed first and foremost. +10
Goddamn ZH... you're helping to change the world. Good Job.
Keep up the good job ZH. Your efforts really mean a lot to those of us who still respect the rule of law.
Btw, your next project should be aimed at the CFTC and its new Commitment of Traders format. They are still accepting comments. One of the changes they want to add is only include data going back 3 years. That is pure bs.
We need at least 10-15 years to build a viable model - if not 20-30 years.
Hmm and Euro land pass claw backs
http://www.google.com/hostednews/afp/article/ALeqM5jyWKnJm7LhUgctEZWFZXY...
Congratulations Tyler & Team...
We are deeply indebted to you guys, for bringing the truth out to the common man...
I just realized something.
Here we were all waiting for the "Fall Crash", and so far in September, no go.
Thats because its still technically summer for 3 more days!
Fall Equinox, September 21, 2009
The turning point! More dark than light! More night than day!
Very commendable work upon Zero Hedge and Tyler Durden for exposing HFT, flash, etc. I owe a big thanks.
And while we all bash our representatives, it's also nice to see a morsel of productive work from the Hill -- thank you Kaufman, Schumer for pursuing the matter.
Be warned! That if flash trading and HFT 'predatory' algos resulted in any undo upside momentum, that it's absent could result in either a stalled market or a potential reversal. And if Kaufman's concern of lack of liquidity on the downside (turn the computers off) is even remotely correct, any correction might prove to be more severe than many expect.
Keep pressing,
Chris Monoki
That was quick.
Yo ZH
Good work. Now on to more important things, like why I have to scroll down for what seems like forever just to get to content. What the feck? I know I sound like a broken record, but do you get a choice on where those assholes, I mean sponsors, put their adds on the site or what?? Far be it from me to imply that a banner ad advising me not to fear another stock market crash isn't tempting me to part with my money
Thanks You! ZH Keep up the good work.
SEC such a joke if they do ANYTHING right it will be an "outlier"
-G
OK, we have 1 outlier now. Pray for more.
Awesome time on the first mile, but this is a marathon. Zero Hedge deserves much of the credit for this development and I will say with no reservations, you guys are awesome.
However.
Tomorrow the sun rises and shines upon countless other injustices ongoing in NYC and elsewhere on this Earth. I get the feeling that you know what to do.
But in the meantime, you have my gratitude.
Interesting sentiments... New random super hero idea: a guy that corrects the financial wrongs done that the system and law can't handle.
Agreed, Andy. I often think/comment in a similar vein. I'm working on becoming a financial crime fighter, sometimes jokingly referring to wearing a spandex jumpsuit when doing so. However, I will do so solely within the confines of the rule of law, to do otherwise is hypocrisy and begins a ride down a slippery slope.
And frankly? There is plenty of law breaking going on to catch, you just need sufficient initiative and the right mandate. All I need right now is a little help and time with the latter. Hopefully there is still a system left to save by the time I get into a position to affect that change.
Congratulations.
Great news but the SEC will have to levy huge fines or seek jail time for those that still do HFT's to enforce the change.
Otherwise not much will have changed.
sorry but that dosn't cut it. There are way too many manupulation in the market to be considered a fair playing field. That cosemetic surgery makes believe that everything else is fine.But it is not. The FED interferring and the goverment,the big banks collision in propping up or bringing down what they like or dislike for that matter,is way too powerful for the regular investor whether directly or through the incompetent fund managers. The whole thing is a big casino, and the risk premium for entry asked by investors should be north of 50% discount to current prices. After all,you are buying papers that don't give you a right to anything............
Of course it doesn't cut it, but be thankful.
Thanks ZH.
well maybe they should not charge data feeds
another scam on free open mkts
DATA FOR ALL level 3
maybe they should not charge data fees
another scam to free open mkts
LEVEL 3 DATA for free for all realtime
Wow. Incredible job Zero Hedge!!! SEC you did nothing but your job. No pats on the back. No IOU's. No BS.
Any final decision will likely be months away. Another proposal and comment period. They proposed short-selling changes months ago and are still "seeking comment." I think they just want the attention off HFT.
It will be interesting to see who voluntarily stops HFT now and who does not, wringing the last bit of profit to the end. Nice work TD and team! Now, on to dark pools and the rest of the mess. This is a great start.
Prepare for the Zero Hedge sequel: Rise of the Dark Pools.
Seriously, aren't dark pools somewhat self-regulating? What the larger exchanges are supposed to provide are liquidity because of the large population of potential buyers and sellers. By definition, that shouldn't exist in the world of dark pools. Caveat emptor to anyone who wants admission into a "special" class.
Well done! Thank you, SEC!
Kaufman is Biden's successor from Delaware, no ??
What is his background ?? Might have been a rogue trader, now gone legit in elder years.... at least as legit as you can get in the Senate.
FDR cleaned up SEC by letting old Joe Kennedy run it . FDR was smart enough to know that catching financial crooks is a job for a financial crook.
Does anyone not see the blatant lie in this headline? More propoganda from Tyler. The 5-0 vote was on wether they should propose banning flash trading. It wasn't a vote to ban flash trading.
http://online.wsj.com/article/SB125322159618320841.html
Tyler likes to make it seem that the MSM lies, and he is the only one telling the truth. Most of the time, I feel like he is the larger lier.
Here at ZH you have the freedom to feel any way you want on an issue. The fact remains that the process at the SEC requires a vote of Commission members followed by a another vote of Commission members after a public comment period and an open session of the Commission. The headline from my perspective is in conformance to the information contained under it.
Have a great day!
Outrageous! I just paid top dollar to park my server farm next to Art Cashin's trading booth. Now I'm gonna have to send pikers like Bud snooping around town for whale sightings.
-Gordon Geko
For inwestors to have confidence, the SEC must ensure that high frequency trading, dark pools, potential conflicts of interest and other market structure issues are not undermining the interests of long-term investors.
I for one cannot but remain cynical of the process until the process demonstrates it is capable of churning out more than a few crumbs. Not to take anything away from today's action. Flash should have never happened and I am more than a bit pleased that it is one step closer to the status of a footnote of history. Every journey begins with a step and we have many more steps to take before I have confidence that this much needed process is indeed underway.
Thanks TD and everyone else that played a part in this action.
This one, my friends, can be laid solely at the feet of Tyler and his crew. Who would've thought that an upstart little blog could rattle a behemothalian and corrupt government agency into taking a small step in the right direction? If it weren't for ZH most people would not even have known about this clever little scheme of looting small investors. Kudos ZH. Keep up the good work.
Now let's get on with the task of dismantling the fountainhead of all corruption and criminal activity in our society - the federal reserve.
Amen, Gordo. Let's end the Fed!
Many years ago I participated in a riot in Genoa, Italy. I remember the thrill of ransacking a small bank branch, smashing the computers and throwing the files around, etc.
Perhaps that type of vandalism is more suited for the European temperment. Nevertheless it would make a great shot for CNBC to loop all day, masked protesters attack the Eccles Building...
Congrats ZH, BUT...........
FIRST, they will redefine Flash Trading........so no one who does it will really have to stop.......then.......
congrats ZH, BUT.....
FIRST, they will redefine Flash Trading.......
so no one who currently does it will have to stop.....
THEN........well, you know
I guess this makes the software that Sergey downloaded, obsolete.
Speaking of Sergey and sweeping things under the rug...
http://www.reuters.com/article/ousivMolt/idUSTRE58F6L220090916
Actually, the SEC voted unanimously to seek public comment on a flash trading ban... It's a subtle difference.
ZH not only school us all on what is going on, they give us hope. That is not a small thing in these times. Even if it all goes to hell, this blog is a beacon for all of us who crave integrity. I have said this before. I can handle a crisis, disruption, displacement, if I think we are working together as a team to fix it. If rule of law survives this, we have most everything we need to make it and be pretty happy.
ZH, keep your spotlights burning bright. And thanks for being a winning team we can all feel like a part of.
Yo ZeroHedgies, I take nothing form ZH saying this. Our interest in this blog supports this blog ($ are better probably). They are scared of TD because they are scared of us. Boys and girls, we did this too. We must stay vigilant, too. Thanks to everyone here.
Insurrection Babee!
I am Tyler Durdan. I am Marla Singer. I am ZH.
Dear Government,
I know you steal from me. Be scared. Really scared. Fly straight bitch.
I can't say enough how much this blog makes me feel better that someone is watching and risking enough to call out injustice.
Thank you Tyler and Team at Zerohedge and for keeping it as real as it gets. Contributors and conspirators, I hope you are in for the long haul, we got a way to go!
Why is it, after reading the bio's of chairs at the sec that not one of them have done the jobs that they regulate?
> Why is it, after reading the bio's of chairs at the sec that not one of them have done the jobs that they regulate?
And if they had performed the jobs that they regulate (such as Goldman alums throughout the regulators), then you would be crying foul over that.
Can't have it both ways...
When I see an actual ban in place with significant punitive measures that are actually enforced THEN will I count the chickens on this one. Don't let up on the SEC until the job is finished, otherwise they'll just shine it off. Let's not forget these assholes allowed flash in the first place so they deserve ZERO congratulations for sorting it out (if they even ever do).
It's like me punching you in the face and then offering you a cold-pack. Does that make me a good guy? NO! Heads still need to roll at the SEC.
And then it's time to shoot down the next duck. This is just a beginning.
Finally. Absolutely awesome work from ZH and the ZH readership to bring this all to light and apply pressure where it hurts. The MSM sold out and betrayed US citizens decades ago. Independent, largely unfunded media is now routinely outperforming the MSM in the quality of content.
I have a bad case of confirmation bias when reading ZH.
"confirmation bias" used to be called camaraderie and support.......I still call it that.
Plus, those who dissent are not only allowed, but often embraced.
Turn off the snarky cleverness machine and you can see more clearly.
DrPsycho, you have have a beautiful way with words. While the sardonic wit thing can be fun, this occasion, in my opinion, really should be all about praising good works. You do some fantastic stuff, TD, you really are fighting the good fight.
Get rid of market fragmentation. It is very expensive to trade in a fragmented market. Get rid of payment for order flow, it is a conflict of interest.
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