The traders then use superfast computers to trade ahead of pending buy and sell orders to gain what is seen by some as an unfair advantage on other traders.

Saying she was "concerned" by the issues presented by the use of flash orders by stock exchanges and electronic trading systems, SEC Chairwoman Mary Schapiro ordered a review of the practice earlier this year.

"Since that review was undertaken, I have asked the staff for an approach that can be quickly implemented to eliminate the inequity that results from flash orders," Schapiro said in a statement. Such a proposal would first need to be approved by the full commission and be open to public comment, she said.

Schapiro's order comes in the wake of concerns over flash trading that were expressed recently by U.S. Sen. Charles Schumer (D-NY). In a dated July 24, Schumer urged the SEC chairwoman to ban the practice because of the unfair advantage it gave to larger brokers.

"This kind of unfair access seriously compromises the integrity of our markets and creates a two-tiered system where a privileged group of insiders receives preferential treatment," Schumer wrote. The practice deprives others of a "fair price" for their transactions, and threatens to "undermine the confidence of ordinary investors" he wrote.