The regulators have a solution: more regulation. And, their earlier gripes notwithstanding, the exchanges agree.
The Securities and Exchange Commission took a step to curtail the chance computer glitches disrupt markets, proposing rules that also would impose standards for the electronic architecture of private trading venues known as dark pools.
The proposal, approved unanimously on Thursday, would boost safeguards that exchanges and clearinghouses have followed on a voluntary basis since shortly after the 1987 stock-market crash. The plan also would make those safeguards mandatory and for the first time extend them to dark pools with significant trading activities in the market or a single stock….
Exchange officials support the SEC proposal, saying it could bring more clarity to market participants….
The proposed rules would apply to an estimated 44 exchanges, clearinghouses, dark pools and other market participants, which would have to comply with technology standards for their computer architecture, test their backup systems and disaster recovery plans at least once a year and notify the SEC of any systems disruptions.