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Commission Proposes Large Trader Reporting System

Last week, the SEC proposed new rules that would create a system tracking large traders, and potentially enhance the agency's "ability to identify large market participants, collect information on their trades, and analyze their trading activities.

The Commission indicated that the new tracking system is necessary because large traders, particularly high-frequency traders, are playing an increasingly significant role in the securities markets.

The proposal defines a large trader as "a person, including a firm or individual, whose transactions in exchange-listed securities equal or exceed (i) two million shares or $20 million during any calendar day, or (ii) 20 million shares or $200 million during any calendar month." These large traders would be required under the proposed rules to:

  • File a form with the Commission identifying themselves;
  • Begin using a Commission issued large trader identification number;
  • Maintain records similar to the information covered by the Commission's Electronic Blue Sheets; and
  • Make these records readily available to the SEC.

The Commission is seeking public comments on the proposal. Comments may be submitted via: http://www.sec.gov/cgi-bin/ruling-comments?ruling=s71010&rule_path=/comments/s7-10-10&file_num=S7-10-10&action=Show_Form&title=Large%20Trader%20Reporting%20System

The full text of the Commissions large trader system proposal is available at: http://www.sec.gov/rules/proposed/2010/34-61908.pdf