Financial Regulatory Forum

US SEC sets market review, high-frequency probe

By Rachelle Younglai and Jonathan Spicer

WASHINGTON/NEW YORK, Jan 13 (Reuters) – U.S. securities regulators took their first stab at deciding whether rules are needed to curb high-frequency traders, whose lightning-fast computer programs now dominate equities markets.

In a move that could overhaul how markets function, the Securities and Exchange Commission voted on Wednesday to seek public comment on the rapid trades, the anonymous trading venues known as dark pools, and other market developments that have blossomed over the last decade.

The SEC will publish a so-called concept release asking whether the current structure of markets is fair to investors and whether they have the tools to protect their interests.

“The equity markets have undergone extraordinary change,” said SEC Chairman Mary Schapiro. “At the commission, we must continually assess how changes in the market are affecting investors.”

The 60-page document asks whether high-frequency traders — the proprietary firms, banks and hedge funds that use sophisticated algorithms to make markets and profit from tiny imbalances — present systemic risk.

US SEC mulls plans to safeguard naked market access

By Rachelle Younglai

WASHINGTON, Jan 12 (Reuters) – U.S. securities regulators are mulling a proposal that would require more supervision of unlicensed traders who gain unfettered access to public markets, two people familiar with the plan said on Tuesday.

Regulators are considering a proposal that would require brokerages that rent out their access to the markets to have rules in place to protect the markets against potential mishaps from unlicensed traders, the two people said.

The practice known as “naked” access or “sponsored” access, is when brokerages that have been approved to trade on an exchange rent their access to traders who are then able to shave milliseconds from the time it takes to access the markets.

US SEC review expected to stir market controversies

By Jonathan Spicer

NEW YORK, Jan 11 (Reuters) – Regulators are set to stir old controversies this week when they meet to release a paper on high-frequency trading and the broader U.S. equity markets, expected to review myriad changes over the last decade.

The U.S. Securities and Exchange Commission will vote Wednesday on whether to issue the concept release on everything from placing traders’ computers next to exchange computers, known as co-location, to the value of anonymous venues known as dark pools.

The SEC, under pressure by some lawmakers and others to do the comprehensive review despite no serious problems in stock markets, said this month the paper would look at “the performance of equity market structure in recent years,” and solicit public comment.

US SEC cracks down on how companies are governed

Rachelle Younglai

WASHINGTON, Dec 16 (Reuters) – U.S. companies will have to disclose their compensation practices and board members’ qualifications under rules adopted by the Securities and Exchange Commission on Wednesday.

The SEC voted 4-1 to change how companies govern themselves and provide more information to investors, who have criticized lax boards and lavish executive compensation.

“Good corporate governance is a system in which those who manage a company … are effectively held accountable for their decisions and performance,” SEC Chairman Mary Schapiro said at an open meeting.

Top U.S.court weighs Sarbanes-Oxley auditing board

The U.S. Supreme Court is seen in Washington, September 29, 2009. REUTERS/Jim Young  By Rachelle Younglai

WASHINGTON, Dec 7 (Reuters) – The U.S. Supreme Court hears a case on Monday that could alter how corporate America is audited and overhaul the Sarbanes-Oxley corporate reform act.


Bank-run dark pools see change to one U.S. SEC proposal

Two boys hold onto a rock-pool fence as they watch huge waves, whipped up by a large storm, crash onto rocks at Sydney's Narrabeen Beach.By Jonathan Spicer

NEW YORK, Dec 4 (Reuters) – Officials at two bank-run dark pools — the anonymous stock-trading venues that face sweeping rule changes — expect U.S. regulators to modify a proposal that would make it immediately clear where trading takes place.


Proposed U.S. risk regulator overlaps SEC, CFTC – futures regulator Gensler

WASHINGTON, Nov 17 (Reuters) – A proposed super-regulator for the U.S. financial system could result in overlapping overseers of the securities and futures exchanges, said the chief futures regulator on Tuesday.

U.S. Senator Dodd to unveil financial reform bill on Tuesday

U.S. Senator Chris Dodd (D-CT) laughs at a joke told by President Barack Obama to the audience during a fundraiser for Dodd in Stamford, Connecticut, October 23, 2009.  REUTERS/Jason Reed   (UNITED STATES POLITICS) By Kevin Drawbaugh

WASHINGTON, Nov 9 (Reuters) – U.S. Senate Banking Committee Chairman Christopher Dodd will unveil long-awaited draft legislation on financial regulation reform on Tuesday, his office said on Monday.


U.S. SEC says insider-trading may be a “business model” for some hedge funds

Robert Khuzami, director of Enforcement at the Securities Exchange Commission, speaks at a news conference in Washington, June 19, 2009.    REUTERS/Joshua Roberts    (UNITED STATES CRIME LAW BUSINESS)   By Jonathan Stempel and Rachelle Younglai
NEW YORK, Nov 6 (Reuters) – A top U.S. securities regulator said some funds may now view insider trading as a central tenet of their business models, rather than as a one-time opportunity for big rewards as sometimes happened in the 1980s.