Technology has revolutionized equity markets and regulators are struggling to keep pace. That may soon change, due to a series of pending reforms announced by Securities and Exchange Commission Chairman Mary Jo White during a speech before financial industry professionals in New York City on Tuesday. She provided the most comprehensive overview to date on how she plans to tackle such controversial topics as high-frequency trading and the private trading venues known as “dark pools.”
Regarding high-frequency trading, White said the SEC should not “roll back the technology clock” or prohibit algorithmic trading. Instead it will assess the extent to which computer-driven trading may work against investors, rather than for them. An area of concern is that instability arising during a broad market event may “simultaneously affect hundreds or thousands of stocks, triggering many trading pauses and re-openings over a short period of time.”
