New requirements for brokerage firms are being considered by Federal regulators to handle “unfiltered” or “naked” sponsored access. Brokerage firms eligible to trade on exchanges can receive access to unregulated clients. The new statutes would be angled to help minimize risk from their trading customers who receive immediate access to markets allowing them to buy or sell stocks.
Regulators have expressed apprehension with the practice, fearing that electronic errors from high-speed trading could experience glitches and negatively affect the market. The proposed rule would demand that brokerage put controls in place to minimize error from the sponsored trading costumers.
Wednesday, the Securities and Exchange Commission made the decision to open the vote to the public.
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