Back in March, CFTC Chairman Gary Gensler roiled Wall Street when he announced he would put forth a new rule proposal that would regulate co-location services, offered by some exchanges--such as the Chicago Mercantile Exchange and the IntercontinentalExchange--and various market centers. He made good on that promise last week when he proposed new rules that would essentially level the playing field for futures traders.

The goal is to ensure market participants have equal access to "co-location and/or proximity hosting services" without "barriers that act to exclude some market participants from accessing these services." The rule would essentially regulate fees, making it hard to jack up prices in ways that deny small firms access.

One huge issue is whether the SEC (SEC news) will follow-up with a similar rule proposal for stock exchanges and other market centers. The SEC is clearly exploring this issue as part of a very broad look at the modern markets. The issue of regulating speed has come up, and SEC officials openly talk about possible new approaches.

For more:
- here are the proposed rules

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