SEC's Schapiro Sees 'Technology 101' Issues Behind Recent Glitches

   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 [e-mail].

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