U.S. securities regulators told stock exchanges to collaborate on making markets more resilient, an attempt to prevent another disruption like Nasdaq OMX Group Inc.'s three-hour halt last month.
After Securities and Exchange Commission Chairman Mary Jo White's meeting with the top executives of the nation's stock and options markets in Washington on Thursday, the regulator said it asked them to “identify a series of concrete measures designed to address specific areas where the robustness and resilience of market systems can be improved.” NYSE Euronext Chief Executive Officer Duncan Niederauer said they have 60 days to respond.
White scheduled the gathering after Nasdaq's securities information processor, a system for distributing stock quotes, failed on Aug. 22, prompting a three-hour trading halt for thousands of companies. The SEC asked exchanges to develop plans to bolster the SIPs run by Nasdaq and NYSE Euronext, review other potential points of failure, and evaluate rules for canceling transactions and restarting trading after halts.
“Our homework assignments are clear, they require collaboration and we've got 60 days,” Niederauer said in Washington after the meeting.
In the SEC's statement, White said she emphasized the need for exchanges to work together on the issues she identified. Niederauer and CBOE Holdings Inc. Chairman William Brodsky both characterized the talks as “constructive” during interviews in Washington.
“I thought she did a great job,” Brodsky said. “We're going to cooperate together, and I think it is overall a very positive thing.”