The SEC has launched a broad investigation into whether exchanges favor large trading companies at the expense of smaller customers.  The enforcement inquiries emerged from examinations by the Commission of how exchange operators - some of which are SROs - manage conflicts of interest with hedge funds, high-frequency trading (HFT) groups, banks and asset managers. The regulatory concerns were heightened by the collapse of futures broker MF Global and its missing customer funds, which put a spotlight on the role of exchange operator CME Group. According to people familiar with the probe, SEC officials are focusing on whether operators use multiple exchanges to appease customers which provide large order flows. This would allow them to grant advantages to some customers by using different rules on different exchanges, without violating rules barring discrimination on any one exchange. All major US exchanges operate multiple markets. They are often the legacy of acquisitions and use different pricing schemes or trading systems.  The CBOE suspended one of its top compliance officers last month, according to people familiar with the matter, as the SEC’s probe homed in on regulatory practices at the company’s NJ-based stock exchange, CBSX. CBOE revealed an SEC probe, saying that the agency was “investigating CBOE’s compliance with its obligations as a self-regulatory organization under federal securities laws.”  It said that it was co-operating and had launched its own internal probe. In an SEC filing last month, BATS Global Markets said it had received investigative requests from the Commission related to its communications with customers, including trading firms and banks that are also its shareholders.  BATS operates 2 US stock markets. For further details, go to:   [FT.com via CNBC.com. 3/12/12].