Joint statement out of US regulators on Friday regarding Thursday’s Flash Crash. Operative pars:
…We are devoting significant resources and expertise to this effort.
As we determine the cause and contributing factors, we will make our findings and any recommendations public.
Thursday’s unusual trading activity included extreme volatility for a number of individual securities. This is inconsistent with the effective functioning of our capital markets and we will make whatever structural or other changes are needed…
Saying, in other words, please get off our backs Senator Kaufman.
The Delaware democrat clearly smells HFT blood after this week’s antics.
Refusing to accept the voting down of his too-big-to-fail amendment to the Wall Street reform bill as a setback, Ted Kaufman has now joined with Virginia’s Mark Warner in proposing that the legislation also includes an instruction that the SEC and CFTC report to congress on the flash crash episode.
In fact the two men have written to Senate banking committee chairman Chris Dodd, pointing out that “a temporary $1 trillion drop in market value is an unacceptable consequence of a software glitch..”
The refomist talk now is all about tagging high frequency traders, auditing the results to detect manipulation, introducing “shock absorbers,” and so on.
It’s all go!
Related links:
Insta-outrage, politicians and the flash crash edition – FT Alphaville