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May 31, 2022

SEC Proposal Would Bring Much Needed Oversight and Transparency to the Activities of High-Frequency Traders

WASHINGTON, D.C.—Legal Director and Securities Specialist Stephen Hall issued the following statement on the filing of Better Markets’ Comment Letter to the Securities and Exchange Commission (SEC) in response to the agency’s proposed rule to modernize and expand the definition of those firms that are “dealers” or “government securities dealers” subject to SEC regulation:

“This proposal will help enhance transparency, market resilience, and investor protection by bringing more high frequency trading firms under the SEC’s regulatory framework for dealers. Every day, these firms trade heavily in the markets for their own accounts and as part of their regular business. They have grown tremendously in recent years, now representing roughly 50% of the trading volume in the U.S. equities markets and 48% of the volume in the U.S. Treasury interdealer market.

“As history has shown with the 2010 flash crash in the equities markets and the 2014 flash crash in the Treasury markets, these firms and trading strategies pose substantial risks to the stability of the financial markets.  They can also engage in predatory trading practices that pick the pockets of countless retail and institutional investors.

“Yet despite the importance of these firms, and the threats they present, many are not registered with Commission as a dealer, even though they provide dealer-like functions. The SEC’s proposed rule will clarify and expand the definition of a dealer, conferring numerous benefits by making sure that these firms register with the SEC and adhere to capital, reporting, examination, and anti-manipulation rules.  And the rule will promote fairness and competition among registered and unregistered dealers by applying similar rules to all dealer activities. The SEC should move swiftly to finalize this proposal and require these firms to register as dealers or government securities dealers.  The markets, investors, and those firms already required to register as dealers will all be better off as a result.”

Read our full comment letter here or click the button below.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

Contact: Anton Becker, Communications Director, at 202-618-6430 or

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