Senator Ted Kaufman (D-DE) has delivered a letter to SEC Chairman Mary Schapiro and four commissioners urging them to end sponsored access and “combat manipulative high frequency trading algorithms,” according to a statement from his office.
In the letter Kaufman wrote, “While it is clear that high frequency trading brings certain benefits to our markets, it is also clear that manipulative high frequency algorithms are almost certainly operating today and that sponsored access creates a systemic risk today.”
He added, “Given that the Commission under current procedures is now blind to high frequency operations, the need for immediate action should not wait until the Commission has completed its comprehensive review.”
Kaufman also included an attachment to his letter that detailed three areas where he sees further action needed by the commission including consolidated surveillance authority, dissemination of market data and modernizing best execution reporting standards.
He explained in the attachment, “Fairness may be an elusive and evolving concept in the securities market, but it must be defined and then vigorously defended by regulators.”
“Given the current lack of effective market surveillance we simply cannot permit high frequency practices to continue unchecked without the ability of regulators to observe and stop manipulation or to avert systemic risks,” Kaufman added.