SEC Proposes Banning ‘Naked Access’

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The SEC proposed to ban a trading arrangement known as “naked access,” in a move that could set back the fast-growing high-frequency trading industry.

Naked access allows high-speed traders and others to rapidly buy and sell stocks directly on exchanges using a broker’s computer code without exchanges or regulators always knowing who is making the trades. The practice is akin to members of an exclusive club charging others to use their pass.

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