From the Wall street Journal:
Regulator Aims to Increase Oversight of Computer Trading
Federal commodities regulators are preparing to take their first big step toward reining in high-speed computer trading and subjecting it to tougher oversight.
The Commodity Futures Trading Commission is completing a road map it will use to develop rules aimed at taming the practice of computer trading, which has led to market disruptions such as Thursday's failure at Nasdaq OMX Group Inc. and the 2010 "flash crash" that sent markets plunging in a matter of minutes.
The CFTC's move comes as other regulators, including the Securities and Exchange Commission, are also ramping up scrutiny and oversight of computer trading, which has exploded over the past several years and now accounts for more than half of all stock- and futures-market trades, observers said.
The CFTC's road map, which runs more than 100 pages and could be released as early as next week, will address issues ranging from how to control runaway trading algorithms that can wreak havoc in the market to whether high-frequency firms should register with the government. The road map, which must be approved by the commission before it is officially released, could pave the way for more direct scrutiny of such activities, according to Scott O'Malia, an agency commissioner who helped spearhead the plan....MUCH MORE