* SEC looking at whether trades have manipulative effect

* Do fast trades make markets more or less efficient?

WASHINGTON, Nov 20 (Reuters) - U.S. securities enforcers are looking at some of the high frequency trading that hedge funds are doing, a top Securities and Exchange Commission official said on Friday.

The SEC is looking at whether "that trading is having a manipulative effect on individual stocks or other securities," said Scott Friestad, associate director of the SEC's Division of Enforcement.

Friestad told a conference that within the past year, the SEC started eyeing the ultra fast trading at hedge funds.

High frequency traders like hedge funds and banks use computer algorithms to buy and sell shares at lightning speed and capitalize on tiny spreads and market imbalances.

Their activities have attracted the attention of policymakers who say the rapid trades and other recent market developments are favoring sophisticated investors.

The SEC wants to have more information about the fast traders and plans to examine whether they are making markets more or less efficient. (Reporting by Rachelle Younglai; Editing by Tim Dobbyn)