This week, the NYSE and NYSE/Arca have individually filed proposed rule changes that adopt the text of FINRA's (Financial Industry Regulatory Authority) rule 5210, which prohibits the publication of manipulative or deceptive quotations or transactions. The documents specifically use the term Quote Stuffing; a phrase Nanex coined after finding symbols with thousands of quotes per second while researching the flash crash.
Search for 34-65954 or 34-65954 under the Regulatory Actions section here on the SEC site. You can submit comments to the SEC about NYSE's proposal here, and NYSE-ARCA's proposal here. The proposals are practically identical.
PDF of NYSE filing (Release No. 34-65954, File No. SR-NYSE-2011-61). PDF of NYSE/Arca filing (Release No. 34-65955, File No. SR-NYSEArca-2011-90).
This is both a major and a significant first step in the right direction. Because a significant percentage of quotes today are - practically speaking - deceptive, this new ruling should reverse the non-stop explosion of worthless quotes that have plagued our markets since the adoption of Reg NMS in early 2007.
