The Commodity Futures Trading Commission is looking at high-frequency traders to gauge their importance in the markets and consider possible new rules for them.
The agency announced Thursday that it will establish an advisory panel on automated and high-frequency trading. High-frequency firms use super-fast computers and mathematical formulas to exploit split-penny price differences. Their impact has grown and they now account for an estimated two-thirds of all U.S. stock trading.
The speed traders came into the spotlight after the "flash crash" of May 6, 2010, in which the Dow Jones industrial average dropped nearly 600 points in about five minutes.
The growing influence of high-frequency trading has challenged regulators' ability safeguard against market misfires such as flash crashes, the CFTC said in a statement.