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The SEC shall consider rules on high frequency trading companies



(Reuters) – The chairman of the US Securities and Exchange Commission, which seeks to improve transparency in the world's largest bond market, has asked staff for new rules to ensure that major trading companies are properly registered as dealers.

Speaking in New York The Federal Reserve's Gary Gensler said the rules would likely require PTFs, also known as high-frequency trading companies, to report their business to FINRA's Trade Reporting and Compliance Engine.

The SEC, as the US market regulator, should require such trading companies to comply with the rules of capital and record keeping and be subject to regular surveys much like stock and corporate bond markets, he said.

Regulators have long argued that high-frequency trading, a computerized strategy that can move billions of dollars in fractions of a second, poses risks to the US government bond market that threaten the market's ability to function, as well as investors' ability to fairly value assets.

Critics say that high-frequency trading can cause excessive price fluctuations in the bond market, which has been met by declines in liquidity.

the business of buying and selling in this market, "said Gensler.

Mr. Gensler said that registration of these trading platforms can help promote resilience and increased access to the financial market.

The Agency's rules would also consider "whether all members of a registered clearing house in this market should be required to include both sides of all their business ̵

1; cash and repurchase agreements; how we can improve or strengthen the Commission's rules for covered clearing houses; and whether we may enable wider access to clearing, possibly also through the responsible use of sponsored clearing and correspondence clearing. "


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