The U.S. Securities and Exchange Commission will launch a website providing extensive data on equity market trades that will provide insight into the world of high-speed electronic trading, its chief said on Wednesday.
Regulators hope the move will help inform a contentious debate about whether high-frequency trading puts ordinary investors at a disadvantage and should face new regulations or monitoring.
“We expect this new tool to transform the debate on market structure by focusing as never before on data, not anecdote,” SEC Chair Mary Jo White said in an excerpt of remarks to be delivered before an industry group of traders.
The new website will “promote a fuller empirical understanding of the equity markets” by giving the public access to “key market metrics and trends” based on billions of records aggregated by the SEC, she said.
“With the click of a mouse, results will be available in clear, easy-to-read charts and graphs,” White said in her remarks.
The announcement of the website, which will go live next week, comes as the SEC continues its broader review of equity market structure and whether new reforms are needed.
White had said during her confirmation hearing that market structure matters, including an examination of issues surrounding high-frequency trading, would be one of her main priorities as head of the SEC.
Last month, White called the chief executives of the major exchanges to Washington for a closed-door meeting to discuss new rules in the wake of a major software glitch with Nasdaq’s stock quote processor that led to a three-hour trading halt.
Among the reforms on the table are “kill switches” that could be deployed to stop trading in the wake of a technology glitch.
The SEC’s new market data website will give the public the ability to examine in detail the various quotes, cancellations and executed trades that flood the country’s 13 exchanges.
A visualization page on the site will allow users to plot charts and graphs to see historic trends.
The site can be used to measure how quickly orders were filled or compare how often orders that entered the market were actually executed versus how many were canceled.
The data on the SEC’s website, while voluminous, represents just a snapshot of the billion records that SEC receives each day through its new system, known as Market Information Data Analytics, or MIDAS, which began operating fully in January.
MIDAS gives the SEC a real-time way to collect and analyze all of the quote and trading data from the public tapes for equities and options, and from the same proprietary data feeds that high-frequency traders use.
The MIDAS system itself was developed by Tradeworx, a high-frequency trading firm based in Red Bank, New Jersey.
The SEC for years has been under pressure to make equity market structure reforms, especially in the wake of the May 6, 2010, “flash crash” in which the Dow Jones Industrial Average plunged more than 700 points before rebounding.
Although regulators later determined that high-speed traders were not directly to blame for the event, it sparked a broader debate about their role in the markets and whether their practice of rapidly cancelling trades to test for market interest was adversely impacting ordinary investors.