Fresh US Drive to Tighten Equity Market

The push comes after over half a decade of constant obstacles to the project's development. Last week the Securities and Exchange Commission (SEC) put forward plans to implement a consolidated audit trail that would monitor activity while accumulating all stock orders and quotes in the US. The move was first conceived in the aftermath of the Flash Crash six years ago.

The events of May 2010 proved how limited authorities' understanding was of market complexities in the 21st century; a modern domain characterised by the super-fast speeds at which data is now sent back and forth to execute trades across a high number of venues.

According to a report in the Financial Times online, Mary Jo White, chair of the SEC, stated last week:

"Simply put, the benefits that technology has created for trading in our markets must also be fully realised in the commission's regulation and oversight of those markets."

The SEC will line up with the Financial Industry Regulatory Authority (FINRA) to form a joint submission of the proposals, which will contain all equity-based securities including exchange-traded funds and OTC equity products. 

"These systems do not provide ready access to all the data points necessary for effective oversight. The consolidated audit trail is critical to achieving this objective, and it will generate enormous benefits for the SEC's mission" Mary Jo White added. 

Not all reactions harmonise when the enormity of the data project is held up to the light of efficiency; some industry authorities have expressed how important the introduction of a modern regulatory tool will be to supervisors that need to keep speed with the highly complex and dynamic US equity market.

However, as a computer-powered entity, the market has always suffered from tech hiccups, or 'techups', as they've become known, which compound the fears of certain individuals that the SEC plans will be unworkable and burdensome.