Based on the immediate responses from the High-Frequency community, it seems that a proposed SEC rule that would require traders to code their tickets so their movements can be tracked by regulators doesn’t face a strong opposition from the traders themselves.
In fact, Chris Bartlett, Nobilis Capital, explains: “Normally when the SEC is trying to implement rules and regulations they are often extensive, expensive or disruptive, but in this case they have a good idea that can be implemented within the existing regulatory framework without any real undue burden.”
The proposed rule is the so-called large trader rule, which would require high frequency and other large volume traders to code trade tickets with an identifier. The SEC defines “large trader” broadly as either a firm or individual whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.
Furthermore, Manoj Narang, Tradeworx, said that the new rule won’t negatively impact his trading business, which is what he cares about most. “I agree that the large trader rule could take pressure off high-frequency firms, which I feel exists for no good reason,” Narang said. “This proposal doesn’t have any far reaching consequences in terms of equity market structure. Therefore, it’s a perfectly fine maneuver for the SEC to do.”