Regulator plans to track high-frequency trading: report

(BestGrowthStock) – U.S. securities regulator may formulate a plan to improve oversight of high-frequency trading by keeping track of executed transactions, the Wall Street Journal said, citing people familiar with the matter.

Under the new plan, the Securities and Exchange Commission (SEC) would give the trading firms unique identifiers, which would tag every high-frequency transaction, the newspaper said.

These identifiers would also allow the SEC to keep track of traders who are not registered market makers or broker dealers, the Journal said.

The tagged trading data, released a day after transactions were executed, would be available only to regulators, the paper said.

Regulators are trying to get a better handle on today’s marketplace, especially the high-frequency trading that has proliferated over the past five years and until recently was little known to the broader public.

High-frequency trading is where banks, hedge funds, and proprietary firms use algorithms to make markets and earn thin profits from tiny market imbalances.

It is estimated to account for some 40 percent of all U.S. futures trading, and remained a profitable business during the worst of the financial crisis.

It is not clear which type of traders and transactions would fall under the SEC’s tracking program, the paper said.

The SEC could not be immediately reached for comment by Reuters outside regular U.S. business hours.

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(Reporting by Sakthi Prasad in Bangalore; Editing by Tomasz Janowski)

Regulator plans to track high-frequency trading: report