U.S. securities regulators proposed requiring that high-frequency traders reveal their identities and disclose their trades -- the latest attempt to get a grip on how the lightening-fast trades are shaking up equity markets.
At a meeting Wednesday, the Securities and Exchange Commission voted unanimously for a plan to tag high-frequency traders with ID numbers and give the SEC access to information on their trades. This would allow the SEC to analyze the fast traders' activities as well as the impact their trades have on the markets.
The SEC is already examining whether additional rules are needed to curb fast traders, or firms that use sophisticated algorithms to buy and sell stock in a fraction of a second.
The rapid trading is estimated to account for some 60 percent of all U.S. equity trading. The proposed rules would apply to 400 of the largest traders operating in the U.S. equity markets. Traders would be tagged if they trade at least 2 million shares or $20 million during a day.
To better oversee the U.S. securities markets, the commission must be able to readily identify large traders operating in the ... markets, and obtain basic identifying information on each large trader, its accounts, and its affiliates, SEC Chairman Mary Schapiro said.
At the same meeting, the SEC will consider proposals to ensure investors have fair access to the options markets. Currently there are eight U.S. options exchanges that charge investors different fees to access their markets.
The SEC is considering capping the fee at 30 cents per contract.
(Reporting by Rachelle Younglai and Jonathan Spicer: editing by Maureen Bavdek and Lisa Von Ahn)