Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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May 31, 2001

More FD Woes for the Exchanges?

By Gregory Bresiger

It's the regulation many trading and financial professionals love to hate.

And now the SEC's Regulation Fair Disclosure may force change on the major exchanges, including the Big Board and Nasdaq, to alter their communications policies.

Critics now claim that exchanges issuing press releases are not abiding by the spirit of FD unless they put them on the Net. Most exchange officials assert that the press release is sufficient.

"We haven't found anything yet that for our money works as well as the press release," according to James Duffy, associate general counsel of the Big Board, who made the comment at a public session on FD.

"We continue to believe that the press release constitutes the best single way to insure that new information released during the trading day becomes available to all traders and the investing public as promptly as possible," said Catherine Kinney, executive vice president of the NYSE.

Investor Groups

Officials representing investor groups argued that the standard is "too restrictive" and "is really an outdated notion."

However, many financial professionals are upset with FD, according to a trade group. [see below]

But the above is a mixture of palaver and opinion, almost the equal of a manager arguing a call with an umpire in baseball. Only the umpire's decision is worth anything. And, in this case, the umpire is the SEC.

It is studying FD compliance standards and is expected to issue a report on the reg in the next few weeks, according to a spokesman for the SEC.