WASHINGTON (AP) — The heads of U.S. securities exchanges have agreed to pursue changes intended to limit technical breakdowns and better manage those that occur.
The officials met Thursday with Securities and Exchange Commission Chairman Mary Jo White. White held the meeting just three weeks after a technical outage on the Nasdaq stock exchange shut down trading for three hours.
About a dozen officials participated in the closed-door meeting at SEC headquarters, including the heads of Nasdaq and the New York Stock Exchange. One idea announced after the meeting would be for exchanges to implement "kill switches" that could automatically shut down a firm's trading system. The NYSE has begun work on kill switches.
The exchanges also said they will review their systems and develop plans for stricter standards.
A series of market disruptions in recent years have heightened concerns and hurt investors' already shaky confidence in the markets. In May 2010, the so-called "Flash Crash" sent the Dow Jones industrial average down hundreds of points in minutes before it eventually closed 348 points lower.
The episodes also have put fresh scrutiny on the super-fast electronic trading systems that now dominate the U.S. securities markets. This week, the Commodity Futures Trading Commission took a step toward stricter oversight of high-speed trading, putting forward a broad range of possible rules for public comment.
The SEC plans to finalize rules that would put stricter oversight on the exchanges, requiring them to routinely test their trading systems, for example.
White said in a statement she asked the exchanges to work together and with the SEC "to strengthen critical market infrastructure and improve its resilience when technology falls short."