SEC head encourages securities exchanges to improve market system resilience

Mary Jo White

Mary Jo White

SEC Chairman Mary Jo White met with the heads of U.S. securities markets last week and urged the executives to develop measures to improve the resilience of market systems, including price feeds used by traders and investors.

A price feed malfunction briefly froze U.S. options exchanges on Monday. NYSE Euronext is currently investigating whether a software upgrade at its subsidiary was to blame for the interruption, which came just three weeks after Nasdaq’s U.S. stock price distribution system failed, Bloomberg reports.

White told securities executives to collaborate on developing plans that “address the standards necessary to establish highly resilient and robust systems” for securities information processors and to identify the resilience of other infrastructure systems.

Additionally, White urged the executives to provide SIP plan and/or rule amendments addressing regulatory halts, as well as to review rules related to the trade break process and procedures to reopen trading after a trading halt.

“Our securities markets are strong and work effectively for millions of investors and businesses,” White said of the meeting, which involved representatives from the Financial Industry Regulatory Authority, Depository Trust & Clearing Corp. and Options Clearing Corp. “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.”

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