Consequences of naked access ban for HFTs

http://www.tradersmagazine.com/issues/24_327/hfts-brokers-naked-access-108063-1.html?pg=1

 

so this means that the HFT will have to register the quote prior to sending the order?

 

The new SEC reg to go into effect in November requires that all brokers screen orders for risk before sending them on to the exchange. This may add 10's of microseconds to a few milliseconds delay. This is still considered "direct access" so long as the order is not held on the brokers server any longer than the time needed to review for risk, margin requirements, etc.