Why does the U.S. Securities and Exchange Commission seek to ban flash trades?
he U.S. Securities and Exchange Commission will seek to ban flash trades that give some brokerages an advance look at orders, Senator Charles Schumer said, citing a conversation with SEC Chairman Mary Schapiro. Schapiro assured Schumer in a phone call yesterday that the agency plans to ban the practice, according to a statement from his office. In a separate release, Schapiro said she has asked her staff to draft rules that “quickly eliminate the inequity” that flash orders cause. “It’s preferencing one group over another, and that’s not the way markets should work,” said Michael Panzner, author of “The New Laws of the Stock Market Jungle” who once traded for George Soros’s hedge fund. “It certainly on its face seems unfair and up until now was against the spirit, now perhaps against the actual rules, of fair play.” A ban would reverse decisions since at least 2004, when the SEC first approved the systems at the Boston Options Exchange. Nasdaq OMX Group Inc., Bats Global Markets, Direc
