WASHINGTON (CN) – The Securities and Exchange Commission has proposed giving a unique tracking number to each company or individual that trade more than two million shares or $20 million per day, or 20 million shares or $200 million per month, in market securities.
The tracking number of a parent entity would be attached to trades of all the entities it controls, so trades can be sorted by parent company, and through all broker/dealers used.
With the proposed large trader reporting system, the SEC hopes to capture data it can study to determine the impact of large trader activity on the market.
The Commission’s proposal is a response to rising volatility in securities markets and concern that shorting strategies by large traders may be causing some of that volatility.
The SEC noted in its proposal that it intends to use the suggested reporting system in the same way that it uses Electronic Blue Sheets, to analyze trades in a narrow time frame or a specific security, to investigate possible securities law violations and to conduct market reconstructions to analyze system failures in the markets in the moments before a collapse.
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