The US Securities and Exchange Commission is to formally propose a new rule that would require bulge bracket trading firms to register their identities and disclose their trades to market authorities.
Under the proposals, traders who engage in substantial levels of trading activity would be required to identify themselves to the SEC through a filing with the Commission, which would then assign each trader a unique identification number. Large traders would provide this number to their broker-dealers, who would be required to maintain transaction records for each large trader and report that information to the SEC upon request.
A "large trader" is defined as a person, including a firm or individual, whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.
Introducing the initiative at an open meeting Wednesday morning, SEC chairman Mary Schapiro, says: "The proposed rule is intended to help the Commission reconstruct market activity, analyse trading data, and investigate potentially manipulative, abusive, or otherwise-illegal trading activity."
The actions form part of the SEC's ongoing effort to curb abuses in technology-driven markets. The watchdog already has proposed a series of other rules changes, including a proposal to ban marketable flash orders, a proposal to bring greater transparency to dark pools of liquidity and a proposal to prohibit unfiltered access to markets.