Kaufman urges SEC to make changes

Tagging large trades and consolidating the audit trail must be quickly implemented by U.S. securities market regulators. 

Democratic Sen. Ted Kaufman (D-Del.) is pushing the Securities and Exchange Commission to implement new rules that would make it easier to determine reasons for big gains or losses in the exchanges. 

"Given the acknowledged deficiencies in the SEC's data collection system, it is not altogether surprising that, even after today's hearing and the joint SEC-CFTC report issued on Tuesday, we still do not know what caused the May 6 flash crash," Kaufman said Thursday after SEC Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler testified on Capitol Hill.

The 'large trader' tagging rule proposed in April would allow the SEC to gather information such as accounts and affiliates on large trades conducted at fast speeds across different trading venues. 

The SEC is expected to vote May 26 on another rule requiring national securities exchanges give regulators data to create a consolidated audit trail that collects and aggregates real-time market data. 

Kaufman expressed concern that "rapid advances in technology, combined with market fragmentation, are moving us from an investor's market to a trader's market," saying he couldn't agree more with Schapio's investor-focused strategies. 

During today's Senate hearing, Schapiro said the two primary functions of U.S. equity markets are to provide companies a way to raise capital and provide a venue for investors.