SEC Bans unfiltered access to markets

[listedguru]

http://www.investmentexecutive.com/...624&cat=8&IdSection=8&PageMem=&nbNews=&IdPub=

http://www.sec.gov/news/speech/2010/spch110310mls-marketaccess.htm

"The rule we consider today focuses on a practice whereby broker-dealers hand their customer a special “pass” to access the markets — known as the market participant identifier. The customer, in turn, then gains access to the applicable exchange or ATS. This is known as sponsored access or direct access."



What does this mean for us traders? Do only HFT traders have this unfiltered, naked access to the markets? What about us regular direct access traders?

-Guru

 

[Bob111]

What does this mean for us traders?

nothing..what you see and do is already been "filtered" on every possible level
when this shit will be implemented?

 

[NY0BScalper]

The HFT guys and other participants were allowed to send their orders directly to the exchange, without giving up the precious milliseconds necessary for a broker to do things like "check the margin" or "see if shares can be borrowed." It seems these participants will now be slowed down by having to first send their order to a broker/dealer's risk management algorithm before going to an exchange... a major competitive disadvantage.

All of us daytraders have our orders checked before they're sent. Firms would go belly up, otherwise, if one daytrader made a horrible keyboard error.

 

[listedguru]

Quote from NY0BScalper:

The HFT guys and other participants were allowed to send their orders directly to the exchange, without giving up the precious milliseconds necessary for a broker to do things like "check the margin" or "see if shares can be borrowed." It seems these participants will now be slowed down by having to first send their order to a broker/dealer's risk management algorithm before going to an exchange... a major competitive disadvantage.

All of us daytraders have our orders checked before they're sent. Firms would go belly up, otherwise, if one daytrader made a horrible keyboard error.

Well this could potentially be good news for us daytraders then as it should help level the playing field somewhat?

This article seems to argue that these rules will hurt liquidity:

http://www.thetradenews.com/trading-execution/regulation/4405

"Others are concerned that US equity market liquidity could be compromised if the country acts alone in proposing stricter sponsored access controls."

The two Fortis Clearing executives added that the most significant loss of trading would be among professional market participants and proprietary trading firms. “This will in turn also have a negative effect on the retail investor volume by reducing overall market liquidity and increased market spreads on price, increasing the overall cost-of-trade to the end retail client,” they wrote.

-Guru

 

[Bob111]

you right...only potentially..cause from what i've seen -there is no "real" participants on the markets anymore..you know...housewife's daytrading, investing etc..most of the trading on US markets today done by bots..basically it's bot vs bot..and the only edge they do have is a technical one..HFT type of advantage..

“This will in turn also have a negative effect on the retail investor volume by reducing overall market liquidity and increased market spreads on price, increasing the overall cost-of-trade to the end retail client,” they wrote.

very possible..but on other hand-today's liquidity is a full of shit too..try to unload 300-500 shares at or better yet above the bid, where only 100 shares displayed, on stock with average volume 250-100K.

they(SEC) knew that this BS will have no or very little effect..it's just -see! we are working! not watching the porno all day approach..

hey...SEC..how about this- fuck all new rules and back to good old one's?
no sub penny,all orders are in line with good old priorities rules and they are all same to every market participant,routed to very few ECN's? price,size,time.
is it so fucking hard? why?