By Jessica Holzer
WASHINGTON--Much has been made of the fragmentation of today's
equity markets, with the proliferation in trading venues over the
last decade often seen as complicating regulators' job to ensure
fair and orderly markets.
But Securities and Exchange Commission Chairman Mary Schapiro
argued that two recent hiccups in the markets--Facebook Inc.'s (FB)
botched initial public offering and a software malfunction at
trading firm Knight Capital LLC that cost the company $440
million--were caused by run-of-the-mill computer issues.
"These single-exchange problems are not a result of complexities
or fragmented markets, but rather a result of more basic technology
101 issues," Ms. Schapiro said in opening remarks at an SEC
roundtable on computer-driven trading Tuesday.
She said the events show that "core infrastructure and
technology issues can be problematic in any market structure."
At Tuesday's meeting, trading firms, exchanges and issuers were
set to begin hashing out a plan to stop computer-driven trading
glitches from disrupting markets.
The meeting came as some big banks and exchanges have begun
calling for uniform standards for computer controls and other
changes to prevent such problems.
Market participants--including representatives from BATS Global
Markets Inc. and Getco LLC--on Tuesday appeared supportive of the
idea of creating "kill switches" that would allow exchanges to shut
off trading by broker-dealers or trading firms if their trading
breaches certain pre-determined limits.
Write to Jessica Holzer at jessica.holzer@dowjones.com.
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