Two years ago, the Federal Reserve of Chicago warned the Securities and Exchange Commission about the dangers high-frequency trading posed to financial markets and the overall economy, but SEC regulators have been slow to move on reforms and rules that would limit the practice, according to a Reuters report. High-frequency trading has caused multiple damaging “flash crashes” in the two years since, and the SEC has instituted small reforms aimed at mitigating the damage. But it is still dragging its feet on large-scale proposals by the Chicago Fed and other proponents of limiting the practice, Reuters noted: The Chicago Fed said exchanges and other trading platforms should install more risk controls, even if it slowed down trading, including a “kill switch” at the trader workstation level.
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