SEC votes in favour of high frequency trading audits

High Frequency Traders News reported that: a rule intended to ease the ability for exchanges to track information about high frequency trading was approved on July 11th by the Securities and Exchange Commission. The rule, narrowly approved by a 3 to 2 vote, will allow for the creation of a consolidated audit trail. The system, based on trade tagging and data collection, will aid the tracking of trade order information, leading to a better understanding of high frequency orders.

The rule is a culmination of the SEC’s ongoing investigation of the 2010 ‘flash crash’, in which the Dow Jones plummeted by 1000 points in half an hour, before quickly recovering and closing 348 down.

Exchanges and brokers must now report all trade data by 8am the next working day; welcome news for brokers, who were originally slated to provide real-time reporting.

It currently takes as long as several days or weeks for the SEC to obtain individual trader information.

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