Put this down to "Elections can mean something."It looks like the case of Goldman Sachs's allegedly purloined high speed trading software, aka "Flash Trading", which a number of observers, myself included, have noted sounds a lot like front-running the entire stock market, now appears to be creating some regulatory push-back.
Basically, this allowed high speed servers co-located with the markets to execute trades in the milliseconds between when other trades are initiated, and when they are completed.
First, as a result of questions raised by Senator Charles Schumer, both Nasdaq and Bats Global Markets have decided to stop allowing brokerages to execute trades in this manner on their exchanges.
The Financial Times notes that this sort of automated trading currently accounts for over ½ of all US stock trades.
Additionally, it appears that the S.E.C. is looking at restricting the process.
Here is a simple solution: Require that any trading done by computers be delayed by at least 15 minutes from initiation to execution.
It also looks like the S.E.C will crack down on "naked" short sales, where an investor sells shares he does not have, as opposed to borrowing shares to sell, which they would purchase and return at a later date.
On the commodities side of the equation, the FTC is issuing new rules to restrict the ability of traders to manipulate the markets.
I'm wondering when the Giethner/Summers shoe will drop, and they will push for elimination of these regulations, because it makes US markets "less competitive."
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