The Securities and Exchange Commission (SEC) on Wednesday, May 26, proposed a new rule in reaction to the May 6 market plunge requiring self-regulatory organizations (SROs) to establish a consolidated audit trail system that would enable regulators to track information related to trading orders received and executed across the securities markets. The SEC also voted unanimously to approve rule changes improving the quality and timeliness of municipal securities disclosure.
SEC Chairman Mary Schapiro said that if adopted, “this consolidated audit trail would, for the first time, allow the SEC and other market regulators to track trade data across multiple markets, products and participants in real time. It would allow us to rapidly reconstruct trading activity and quickly analyze both suspicious trading behavior and unusual market events.”
Last year, the SEC says it set up an agency-wide task force to carry out the audit trail initiative and begin the process of developing the rulemaking proposal recommended to the Commission on May 26. The SEC says its proposal seeks public comment and data on a broad range of issues relating to a consolidated audit trail.