The head of the SEC, Mary Jo White, has announced a broad set of new initiatives and proposed regulations that are aimed at giving the agency a tighter grip on the high-frequency trading (HFT) firms which have come to dominate daily activity on the stock market. According to a report in the Wall Street Journal, if the new rules are passed, HFT shops would be regulated like public broker dealers, even though most are private enterprises trading their own money, not representing clients. The SEC has also proposed new rules that would try and put a stop to some of the HFT tactics which have roiled the markets, causing so-called "flash crashes."
These new regulations also turn an eye to "dark pools," private exchanges that don't report trades until after they are completed. It weighs whether or not they should be forced to offer more disclosure about the activity taking place there. The SEC is also considering whether or not to regulate certain order types frequently used by HFT traders, specifically trading schemes that many believe allow HFT shops to skim profits off the moves of slower traders. Overall the proposal looks to crack down on the computerized trading that many feel gives an unfair advantage to specialized traders over average investors, and which some worry is destabilizing the markets.