SEC to Require Largest Traders to Register

 

The Securities and Exchange Commission voted unanimously Tuesday to require large traders to register and to share more information. The rule, yet another measure in response to the Flash Crash of May 2010, will take effect in 60 days, with traders given an additional two months to begin registering.

 

The rule will apply to investors that trade more than two million shares or $20 million a day or 20 million shares or $200 million a month. The SEC will assign such traders a unique identification number that they will have to share with their broker-dealer, which will maintain transaction records for these traders.

 

The SEC also proposed creating a unified audit trail so that regulators have one set of data to reconstruct market events.

 

“May 6 dramatically demonstrated the need to enhance the SEC’s ability to quickly and accurately analyze market events,” said SEC Chairman Mary Schapiro. “The large trader reporting rule will significantly bolster our ability to oversee the U.S. securities markets in a time when trades can be transacted in milliseconds or faster. This new rule will enable us to promptly and efficiently identify significant market participants and collect data on their trading activity so that we can reconstruct market events, conduct investigations and bring enforcement actions as appropriate.”

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