Economist Tim Worstall has an distinction to make on the differences between high frequency trading and flash trading in a recent article.
Essentially it is the difference between getting your orders in quicker than every one else, and having a peek at what everyone else is doing before putting your money down. The SEC appears to be conflating the two and has concerns.
With the world condition in banking, could we see some poorly thought out legislation rushed through so that regulators can be seen “doing something”? Or would it level the playing field a little so that those trading operations that cannot afford the overhead of super fast computers and networks are not excluded?