STA 2014 Market Structure Conference
The Mayflower Renaissance
1127 Connecticut Avenue
Washington D.C. 20036
OCTOBER 1-4, 2014
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FOR IMMEDIATE RELEASE
Washington D.C., Sept. 12, 2013 —
Securities and Exchange Commission Chair Mary Jo White today issued the following statement after meeting with leaders of the equities and options exchanges, FINRA, DTCC, and the Options Clearing Corporation.
Chair White called the meeting immediately following the August 22 interruption in the trading of NASDAQ-listed securities.
“Our securities markets are strong and work effectively for millions of investors and businesses. The orderly functioning of those markets and the robustness of our market infrastructure are vitally important to our nation’s economy. That is why we hold ourselves to very high standards.
“Today’s meeting was very constructive. I stressed the need for all market participants to work collaboratively – together and with the Commission – to strengthen critical market infrastructure and improve its resilience when technology falls short. To that end, I asked those at the meeting to work constructively with the Commission staff as we continue to consider ways to enhance the integrity of market systems. They pledged to do so and I expect other market participants will do so as well.
“In short order, I also want those at the meeting – with the input of other market participants – to identify a series [...]
The expression; “when you’re in the restaurant business, you’re going to break a few eggs”, was at times used by traders attempting to explain errors, both in judgment and mechanical, to their supervisors. It was an acceptable term if it was ultimately determined that the error was unforeseen or deemed to be a “one-off” that with corrective actions was preventable from happening again.
If it is determined that the circumstances involving Nasdaq’s outage are in fact along these lines, then we as an industry should breathe a sigh of relief that this one-off event did not create a contagion and that the muted response by investors to both Nasdaq’s share price and overall behavior during the outage was rationale. We should move on with our lives wiser from the lessons learned. But, if a final post mortem shows a smoking gun for larger issues, especially those which put the functionality of a Securities Information Processor (“SIP”) at risk, then the industry’s response should be decisively appropriate. The Nasdaq and NYSE run SIPs to distribute quotes for the three tapes – Tape A, B, and C. Nasdaq’s SIP compiles quotes for Tape C, while NYSE runs the SIP for Tapes A and [...]