Nasdaq grapples with sponsored access

We've noted that high-frequency firms have really shaken up the industry, leading to a host of new issues; one of which is sponsored access. A crop of brokerages that cater to algorithmic-type hedge funds and other high-volume, low-spread firms has led to a fairly new service offering that allows clients to access the Nasdaq directly under the sponsorship of the brokerage.

There is supposed to be some compliance, risk management and general oversight involved. But the Nasdaq wonders whether there might be some lapses, reports Traders magazine. The exchange has proposed some new rules that would keep the playing field level and equally regulated, which pleases the rest of the Nasdaq order flow but doesn't sit well with the new high-frequency brokerages. Their clients are nervous because they fear new rules will translate into delays, which they can ill afford. Stay tuned, as we may see a private sector solution yet. 

For more:
- here's the article

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