WASHINGTON (AP) - U.S. stock exchanges could be subject to tighter oversight of automated trading under a federal proposal that advanced Thursday.
The Securities and Exchange Commission voted 4-0 to seek comment on rules that would require routine testing of trading systems. The exchanges would also be required to notify the SEC about problems, including systems comprised by hacking. Any problems would have to be quickly corrected.
The proposal follows several cases where technical glitches disrupted trading. Stock trading now relies heavily on computer systems that exploit split-penny price differences. Stocks can be traded in fractions of a second, often by automated programs.
The rules would replace a voluntary program that most U.S. exchanges participate in. The public has 60 days to comment on the rules, after which the SEC can adopt them.
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