The US Securities and Exchange Commission plans to create a "large trader reporting system" to identify large market participants, collect information on their trades, and analyse their trading activity.

According to the SEC's consultation document, large traders would be defined as "a firm or individual whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month".

The SEC is proposing that lthesearge traders identify themselves and be assigned a unique identification number for each. Large traders would provide this number to their broker-dealers, who would be required to maintain transaction records for each large trader and report that information to the SEC upon request.

"This rule is designed to strengthen our oversight of the markets and protect investors in the process," said SEC chairman Mary Schapiro. "It would give us prompt access to trading information from large traders so we can better analyse the data and investigate potentially illegal trading activity."

It is seeking public comments on the proposal over the next 60 days through a submission system on its website. 

The large trader proposal is the latest in what the SEC calls "an ongoing effort to promote fairness and efficiency in the markets". Other rules proposed recently include a proposed ban on marketable flash orders, a proposal to bring greater transparency to dark pools of liquidity, and a proposal to prohibit unfiltered access to markets.

Writing in response to proposals to revamp the equity market structure, TD Ameritrade, one of the largest retail brokers in the US, said it "strongly supports" a comprehensive review of the US equity market, but warned that technology drivers such as the rapid increase in High Frequency Trading are impacting retail investors "in many ways; the majority of which are not to their benefit". HFT, through rapid order placement and high cancellation rates, is undermining retail investor confidence in the execution quality they are getting.