Stocks and exchange traded funds (ETFs) advanced in morning trading as investors sought to resume the two-week rally, which has witnessed stocks rising eight out of the past 10 days.

The financial sector seems to be coming under more scrutiny as pay policies for bank employees across the United States would require approval from the U.S. Federal Reserve as part of a proposal to further curb risk-taking at financial institutions.  Under the proposal, the Fed could reject compensation policies that it feels could encourage employees to take excessive risks, reports Edmund L. Andrews for The New York Times.

In an attempt to provide more transparency for credit rating companies and stem conflict of interests, the Securities and Exchange Commission (SEC) is looking at credit rating agencies, Karey Wutowski for Reuters reports.  The credit rating industry was widely faulted for its role in the subprime mortgage debacle and the financial crisis.  One of the many SEC’s proposals includes intending to bar companies from “shopping” for favorable ratings of their securities by requiring companies to disclose whether they had received preliminary ratings from other agencies.

The Financial Select Sector SPDR (NYSEArca: XLF) wasn’t too moved by the scrutiny, and is trading down just 0.5% this morning.

Additionally, the SEC is considering banning flash orders.  A flash order refers to certain members of exchanges, often large institutions, buying and selling information about ongoing stock trades milliseconds before that information is made public.

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