August 13, 2010
The computer-driven trading that is powering increasing share dealing on the world’s stock exchanges could overwhelm trading systems, world markets regulators warned on Friday.
The International Organisation of Securities Commissions’ warning, comes amid anxiety among the investing public at the influence of automated trading in markets, highlighted by the “flash crash” of May 6 in the US. The Dow Jones plunged more than 1,000 points in 20 minutes, a fall unprecedented in its depth and speed.
This week, the Securities and Exchange Commission and Commodity Futures Trading Commission, the two US regulators that are members of Iosco, held the first public hearing into the crash. While regulators still do not know what caused it, they have raised concerns about the role of algorithmic trading and a lack of uniform safety catches across multiple trading venues that exacerbated the fall after it was triggered…
Read Full Article on Financial Times.
Last Updated: August 17, 2010