Nasdaq to stop offering flash trading Sept. 1

The operator of the Nasdaq stock market said Thursday that it would stop a practice that gives some brokerages a split-second advantage in buying or selling stocks.

Nasdaq OMX Group Inc. is voluntarily ceasing the practice, known as flash-order trades, on Sept. 1.

Flash orders give certain members of exchanges, including Nasdaq, Direct Edge and BATS, the ability to buy and sell order information for milliseconds before that information is made public. High-speed computer software can take advantage of that brief period to allow those members to get better prices and profits.

This week, Securities and Exchange Commission Chairwoman Mary L. Schapiro said the agency was moving in the direction to ban the practice.

Said Nasdaq in a statement, “We recognize the SEC’s rule-making process will take time, yet as an exchange we have the ability to move on our own.”

The exchange operator also called on rival markets, including Direct Edge and BATS, to make the same decision.

Critics, including Sen. Charles E. Schumer (D-N.Y.), said the practice clouds transparency and benefits those with advanced trading software. Schumer said in a statement Tuesday that Schapiro personally assured him the SEC would ban the practice.