The Securities and Exchange Commission (SEC) is assessing the impact of high-frequency trading on market efficiency for long-term investors, including those trading small- and mid-cap stocks Reuters reports. The SEC will issue a discussion paper on high-frequency trading, where banks, hedge funds and proprietary firms use computer algorithms to make markets and profit from small spreads and imbalances.

The commission is looking to meet the needs of individuals and institutions, such as pension and mutual funds. It will also review whether smaller institutions have the tools needed to trade efficiently.

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