FINRA Vows to Closely Monitor Fast-Trading Firms

Representing Investors Nationwide

The Financial Industry Regulatory Authority (FINRA) recently announced they will be stepping up surveillance of high-frequency trading firms to insure those firms do not gain a market advantage by side-stepping supervisory guidelines and other industry regulations.

Many observers have long believed so called “fast-trading” firms have been able to gain a competitive advantage over more traditional trading operations, often by skirting the rules. The strategy involves placing a large number of orders to stimulate activity by other traders in a particular issue and then the firm will cancel it’s own orders.

This stepped-up surveillance is welcome by may traders who believe the regulators have lagged behind the more sophisticated trading methods employed by the high-frequency trading firms.