From wsj.com: Fee Pitched for Fast Firms Senator: High-Speed Traders Should Bear Cost of Oversight By JACOB BUNGE Sen. Charles Schumer told regulators that sophisticated electronic traders should bear the cost of monitoring their dealings, with special fees assessed to firms that issue and then rapidly cancel securities orders. The New York Democrat said that such charges could defray the expense of building a new system to track in real time the orders that high-frequency traders pump into U.S. markets, a year after the "flash crash" sent stocks into a 20-minute tailspin. "In the aftermath of last year's Flash Crash, the need for more coordinated market surveillance has never been clearer," Mr. Schumer wrote in a letter to Securities and Exchange Chairman Mary Schapiro, a draft of which was reviewed by Dow Jones. The SEC desired such a "consolidated audit trail" even before the market plunge of May 6, 2010, but its high price tagâestimated by Ms. Schapiro in December at around $2 billion up frontâand other priorities like implementing the Dodd-Frank financial law have held it up. Mr. Schumer said that construction could go faster if the SEC builds on existing functions of the Financial Industry Regulatory Authority, an industry-funded body already performing surveillance on securities markets like the New York Stock Exchange. Private trading platforms and brokers, alongside exchanges, could also shoulder audit-trail expenses, according to the senator. Charging algorithm-powered traders who "cancel a disproportionately high percentage of their trades," Mr. Schumer said, would both chip away at the tracking system's cost and discourage firms that are seen jamming exchanges with orders that are quickly discarded. Heavier fees would arrive as private electronic-trading groups, sensitive to even the smallest pricing shifts, already confront slimmer profits amid a slowdown in overall stock-trading volume. Research firm Tabb Group estimated that high-frequency trading now represents 53% of all turnover in U.S. stock markets, down from two-thirds a year ago. A spokesman for the SEC declined comment on Mr. Schumer's recommendations in advance of a formal agency response to the senator.