SEC moves toward tracking high-frequency firms' trades

The Securities and Exchange Commission is conducting a cost-benefit analysis of tracking transactions of high-frequency trading firms. The agency is expected to move forward with the effort, sources said. The idea is to give each firm a unique identifier that would allow the SEC to monitor traders not registered as a broker-dealer or a market maker. "The SEC can get any data they want, period, but right now it's kind of cumbersome because they have to go through the clearing firm," said a securities lawyer. "This would make it more automated."

The agency is considering reporting requirements that would add transparency in the trading on so-called dark pools, private electronic platforms where large blocks of stock are traded anonymously.

The SEC also has proposed to ban "naked access" for high-speed traders, which allows firms to buy and sell stocks on exchanges using a broker's computer code without authorities knowing who is making the trades.

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