SEC to Impose Reporting Requirements on Large Traders
July 27, 2011 (Xinhua News Agency - CEIS) The U.S. Securities and Exchange Commission (SEC) agreed Tuesday to adopt a new rule to establish large trader reporting requirements, in a bid to further regulate the market.
Under the new rule, large traders are required to register with SEC, which will then assign each trader a unique identification number. Large traders'broker-dealers will also be required to maintain transaction records for each large trader and report that information to the SEC upon request.
The rule will be effective in 60 days. However, large traders will have an additional two months to register with the SEC after the rule takes effect.
On May 6, 2010, the Dow plunged more than 600 points in five minutes before recovering most of the losses. The "flash crash" demonstrated the need to enhance SEC's ability to quickly and accurately analyze market events, said the regulator.
"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," said SEC Chairman Mary L. Schapiro.
The new rule approved by SEC applies to investors whose transactions in exchange-listed securities equal or exceed 2 million shares or 20 million U.S. dollars a day. It also applies to investors who trade 20 million shares or 200 million U.S. dollars a month.