U.S. Securities and Exchange Commission Chair
In a speech at a financial services conference Thursday, White outlined plans to craft rules and recommendations, as well as form a new
“The SEC should not roll back the technology clock or prohibit algorithmic trading, but we are assessing the extent to which specific elements of the computer-driven trading environment may be working against investors rather than for them,” White said.
A particular focus for the regulator is the use of aggressive, destabilizing trading strategies in vulnerable market conditions, White said. To that end, she’s directed
“Given the overwhelming dominance of trading algorithms, it is time that our regulatory regime is updated to take better account of the risks when they are poorly designed or operated,” White said.
But while much of the recent discussion has focused on high frequency trading firms, White pointed out that it’s important to keep in mind many brokers use the same tools on behalf of their customers.
Broker conflicts and how they are impacted by different exchanges is another key area of concern for White. “When fees and payments are not passed through from brokers to customers, they can create conflicts of interest and raise serious questions about whether such conflicts can be effectively managed,” she said Thursday.
In addition to the high-frequency trading and broker conflicts measures, White also directed the
Along with the rules and regulations, White also announced the formation of a new
“While we do not require perfect solutions, our regulatory changes must be informed by clear-eyed, unbiased, and fact-based assessments of the likely impacts — positive and negative — on market quality for investors and issuers,” White said.
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