High-frequency trader Getco has backed regulatory plans to impose curbs on these controversial trading firms but questioned whether these measures alone would prevent a repeat of last year's U.S. flash crash. The U.S. Securities and Exchange Commission and the European Commission plan to introduce, possibly as early as this year, restrictions on high-frequency traders. These firms, which use super-fast computers to spew out prices to other trading firms, would have to continue to quote prices irrespective of market conditions. At the moment their participation is optional. Daniel Coleman, the head of client services business at Getco, speaking at an industry conference on Thursday, said: "We don't think it is unreasonable to explore ways to increase obligations. Market-making obligations would not have stopped the flash crash but we do believe that these obligations do provide better liquidity." U.S. and European regulators are keen to introduce rules to deal with the conditions surrounding the May 6, 2010 flash crash, when the Dow Jones Industrial Average fell nearly a thousand points before bouncing back in a matter of minutes. The SEC said in a report published in October last year that high-frequency trading firms (HFTs) were partly to blame for the crash because they stopped trading on May 6, thereby depriving the market of much-needed liquidity which exaggerated the losses.
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