U.S. stock exchanges will have to keep a closer eye on their electronic trading systems under rules adopted by federal regulators.
The Securities and Exchange Commission on Wednesday voted 5-0 to require routine testing of exchanges’ trading systems. The exchanges also will be required to notify the SEC about problems, including any systems that are compromised by hacking.
The SEC action follows a series of technical disruptions in recent years — notably the “flash crash” of May 2010 — that regulators say shook investors’ confidence in the markets.
The rules take effect in mid-January. They will replace a 20-year-old voluntary program for U.S. exchanges, which include the New York Stock Exchange, Nasdaq and a host of competing electronic marketplaces.
They are intended to reduce the chances of technology problems occurring and to put exchanges in a strong position to deal with them if they occur.
“Failures must be minimized, and when they occur, they must be remediated as quickly as possible and promptly reported (to the SEC),” agency chairwoman Mary Jo White said
