The operators of the NASDAQ and BATS stock exchanges said on Thursday they would stop a practice that gives some brokerages a split-second advantage in buying or selling stocks.
NASDAQ OMX Group Inc is voluntarily ceasing the practice, known as flash order trades, on Sept. 1. Randy Williams, a spokesman for BATS, which also operates computerized stock exchanges, said his company would also quit the practice.
Computerized exchange operator Direct Edge said in a statement that the company was suspending its plan to offer flash functionality, but would continue to offer access to dark pool liquidity through its current Enhanced Liquidity Provider (ELP) product.
Flash orders give certain members of exchanges, including NASDAQ, BATS and Direct Edge, the ability to buy and sell order information for milliseconds before that information is made public. High-speed computer software can take advantage of that brief period to allow those members to get better prices and profits.
Earlier this week, US Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro said the agency was moving in the direction to ban the practice.
“We recognize the SEC’s rule-making process will take time, yet as an exchange we have the ability to move on our own,” NASDAQ said in a statement, which also called on rival markets to make the same decision.
Direct Edge said it “supports the SEC’s broad approach to the myriad issues that have been the focus of recent attention and will, of course, abide by any SEC decisions regarding this or any other matter.”
Critics, including Senator Charles Schumer of New York, have said the practice clouds transparency and benefits those with advanced trading software. On Tuesday, Schumer said that Schapiro personally assured him the SEC would ban the practice.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
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