On September 17, 2009, the Securities and Exchange Commission (SEC) proposed a ban on flash orders, responding to investor concerns that they give select large traders an unfair advantage.
 
In a flash order, a firm wishing to buy or sell a stock can choose to freeze its order on an exchange for as long as half a second.  Investors who only have access to the information displayed as a public quote may be harmed, because they do not have access to the real-time, collocated powerful computers and complex algorithms that enable select large traders to transmit and take advantage of flashed orders. SEC Chairman Mary Schapiro noted that flash orders may create a “two-tiered market” and that, “the interests of long-term investors should be upheld as against those of professional short-term traders when those interests are in conflict”.
 
The proposal to ban flash orders is the first of several steps the SEC is studying to change the structure of U.S. stock markets. The SEC is next expected to tackle dark pools, which are private electronic networks that anonymously match orders. Flash orders are not permitted in Canada because Part 7 of National Instrument 21-101 Marketplace Operation requires a marketplace displaying orders to provide such information to an information processor.
 
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