The SEC unanimously approved a proposal that high-frequency trading forms would have to register withthe Financial Industry Regulatory Authority, the brokerage industrys self-regulator.
The Wall Street Journal reports that, “The regulatory shift could boost regulators ability to monitor markets for potential fraud and abuse, SEC officials said. It would affect about 125 firms, many of them high-frequency traders such as Hudson River Trading, Jump Trading LLC and others. The SEC will collect comment on the measure and would have to vote on it again before it could go into effect.”
[Meet the HFT Defender, Mark Gorton of Tower Research.]
Many of these HFT firms are co-called proprietary trading shops, where the owner-operators trade their own money, and not assets from clients, endowments or pension funds.
This measure would significantly strengthen regulatory oversight over active proprietary trading firms and the strategies they use, SEC Chairman Mary Jo White said after the vote.
In an interview with thehead of business development at Hudson River, Adam Nunes told the WSJ that the new rules wont have a big impact because hsi firm is a member of several exchanges that already outsource regulatory functions to FINRA. For the same reason, its not going to move the dial much in improving oversight, he told the Journal.
