Chair White Discusses HFT and SEC Priorities
In an interview with Stephanie Ruhle for Bloomberg News, SEC Chair Mary Jo White spoke about high-frequency trading ("HFT") and the SEC's regulatory priorities. She also commented on a recent academic paper that found that the SEC's filing process provides possible advantages to certain traders.
Regarding HFT, Chair White explained that, although the markets have benefited from technological changes, wrongdoing continues. To ensure a level playing field, Chair White stated, new rules might be necessary.
Chair White also discussed the SEC's response to the recent academic paper, "Run EDGAR Run: SEC Dissemination in a High-Frequency World," which found that the delay between the acceptance of an SEC filing by the Electronic Data Gathering, Analysis, and Retrieval System ("EDGAR") and its initial public availability on the SEC Web site may provide an advantage to certain traders who pay a subscription fee for direct access. According to Chair White, the SEC is in the process of looking at the study's findings "very carefully," and is performing a full assessment of the entire SEC dissemination system. She affirmed that the SEC will make any required adjustments.
Regarding the SEC's upcoming priorities, Chair White mentioned that a number of changes must be made in the fixed-income markets. To improve these markets, she said, FINRA and the MSRB will soon release regulatory notices concerning fuller disclosures for same-day transactions. Additionally, she stated, the best-execution rule is a step in the right direction, adding that the SEC must focus on pre-trade transparency.
Other SEC priorities for 2015 include improving the resiliency of market structures, fixing system issues, and continuing to work on the regulation of rating agencies.
Related news: Academic Paper Investigates Advantage for High-Frequency Traders in SEC Dissemination Process (with Lofchie Comment) (October 31, 2014); MSRB-Proposed Rule Regarding Best-Execution for Municipal Securities Transactions Published (Fed. Reg.) (September 8, 2014); MSRB Requests SEC Approval to Establish Best-Execution Rule for Municipal Securities Transactions (with Lofchie Comment) (August 20, 2014).