BERLIN (AP) -- The German government plans to propose tighter regulation of computer-driven high-frequency trading on financial markets, a practise that has been blamed for undue spikes and drops in markets.
Germany's Finance Ministry said Tuesday a draft law will be considered by Chancellor Angela Merkel's Cabinet on Wednesday.
The bill would require traders to get special permission before they can deploy computers to carry out millions of trades a second to exploit split-penny price differences.
Such trades would also have to be specially labeled and stock exchanges would need to ensure trading can quickly be suspended when an error occurs.
High-frequency trading came into the spotlight after the "flash crash" of May 6, 2010, in which the Dow Jones industrial average dropped nearly 600 points in five minutes.