Flash Trading: The Simple Economics
Flash Trading Status:
- At the Jan. 13, 2010 open meeting of the SEC, commissioners approved issuance of a concept release (with a 90-day comment period) to address flash trading as part of a larger look at the overall structure of the equity markets. The comment period on the SEC's 74-page concept release on equity market structure expires Apr. 21.
- The SEC is now deliberating whether or not to ban flash trading, with the deadline for a decision open ended.
- If a ban were to be imposed, the SEC would also need to determine its scope and whether or not a ban would apply to options.
- CBOE submitted comments on flash trading to the SEC on Nov. 18, 2009. The comment period for the SEC's proposed ban on flash trading ended on Nov. 23. The SEC received about 100 comments.
- On Oct. 28, 2009, SEC officials testified before the Senate Banking Subcommittee on Securities, Insurance and Investment regarding dark pools, flash orders, high frequency trading, and other market structure issues.