The New York Stock Exchange is making plans to pare back the types of orders customers can place, potentially quieting critics who say their proliferation gives high-frequency traders an unfair edge.
NYSE staff have identified more than a dozen to abolish, pending regulatory approval, IntercontinentalExchange Group Inc. Chief Executive Officer Jeffrey Sprecher said May 8. He called on other market operators to adopt a moratorium on creating new order types.
Order types, the software routines used by brokers to pinpoint the price and size of trades theyre willing to conduct, have been targeted by critics who argue the U.S. stock market is unfairly structured.
Eric Ryan, spokesman for the NYSE, declined to provide further details about the order types that might be eliminated.
U.S. equity trading is spread across more than 50 venues, including the three exchanges run by ICE. Nasdaq OMX Group Inc. and Bats Global Markets Inc. are the other major exchange owners. About 40 percent of trading takes place off exchanges.
CME President to Testify at Senate High-Speed Trading Hearing
CME Group Inc. President Terrence Duffy is among witnesses scheduled to appear tomorrow before a Senate Agriculture Committee hearing on high-frequency trading, according to its website.
Vince McGonagle, head of market oversight for the Commodity Futures Trading Commission, is also expected to testify.
Eliminating dark pools, where orders are hidden until transactions are completed, would fix the U.S. stock market, Duffy said last month in an interview.
Most of the biggest U.S. broker-dealers own dark pools that trade stocks. Flash Boys, the book by Michael Lewis, a columnist for Bloomberg View, argues that dark pools act as a key intersection between high-frequency traders and brokerages investor clients.
