SEC commissioner questions flash crash remedy

By Reuters
Posted Sep. 24, 2010 at 1:04 p.m.

A commissioner at the Securities and Exchange Commission questioned on Friday the value of saddling high-frequency trading firms with tighter market-making rules, a key response to the May “flash crash.”

During the overwhelming number of days in which markets are stable and liquid, the value of subjecting these algorithmic trading firms to new obligations “is not forthcoming,” Commissioner Troy Paredes told a Security Traders Association conference in Washington. He also questioned whether the firms would continue to trade in the rare times of market stress.

Exchanges, under regulatory and public pressure, last week submitted proposals to the SEC that would force market makers to quote closer to the price of the stocks in which they are registered to supply buy and sell orders.

Read more about the topics in this post: ,

Comments are closed.