Many High Frequency Traders Becoming Registered Broker Dealers

Posted - 03/16/2010 | Comments (0)

In January of 2010 SEC Chairman Mary Schapiro expressed concern over high frequency trading situations in which orders bypass the controls of brokers and reach exchanges directly. Subsequently, the SEC plans to ensure that all orders sent to U.S. exchanges be subject to risk controls.

These changes would result in increased regulatory control over high-frequency trading, and high speed trading firms might convert into broker dealers. Through SEC Registration, the firms would be authorized to buy and sell securities. By registering with FINRA, the firms would be authorized to buy them on behalf of customers. By registering as a brokerage firm, the companies would be subject to the same legal, compliance, and regulatory reporting standards in place for broker dealers.

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Posted - 03/16/2010 | Comments (0)