Three members of a Senate subcommittee investigating day trading asked the Securities and Exchange Commission on Friday to enact new rules to stem abuses in the controversial industry.
The plan by Sen. Susan Collins (R-Maine), chairwoman of the permanent subcommittee on investigations, and two panel members, calls for tougher standards than those proposed earlier by the National Assn. of Securities Dealers and the New York Stock Exchange. The SEC will make a final decision on the various proposals.
The three legislators would force day-trading brokerages to warn novice traders that their chances of making money are "substantially" diminished if they open accounts with less than $50,000. They also want firms to tell newcomers that they must earn substantial profits just to cover commission charges.
The subcommittee members would bar firms from arranging loans between customers to cover so-called margin calls, and would force the firms to check that individuals trading money for other people have the required licenses.