SEC eyes IDs for high frequency traders

WASHINGTON (BestGrowthStock) – U.S. securities regulators are considering a plan that would require high frequency traders to reveal who they are and disclose their trades to the Securities and Exchange Commission, the agency said on its website on Wednesday. ( )

The SEC can force large, non-broker firms such as proprietary traders and hedge funds to use an ID number when trading, giving the regulator information about their executions and their effect on the wider market.

The proposal, to be considered at an April 14 meeting, comes as the SEC examines whether additional rules are needed to curb fast traders, or firms that use sophisticated algorithms to buy and sell stock in a fraction of a second.

The rapid trading is estimated to account for some 60 percent of all U.S. equity trading and has been scrutinized by some U.S. lawmakers.

“I applaud the SEC for moving forward with a proposed rule to require tagging of high frequency trades,” said Senator Ted Kaufman. “This is the first step to ensuring the SEC can better understand high frequency strategies and detect any manipulative algorithms.”

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(Reporting by Rachelle Younglai; Editing by Phil Berlowitz)

SEC eyes IDs for high frequency traders