Aug. 8 (Bloomberg) — The U.S. Securities and Exchange Commission is writing new rules in the wake of Knight Capital Group Inc. losses that could turn longstanding policies for how exchanges manage their automated systems into regulations.
After Knight suffered a $440 million trading loss Aug. 1 that almost put it out of business, the SEC began work to bolster existing policies meant to ensure the exchanges' systems can safely handle trading demands, according to a person familiar with the SEC's work who spoke on condition of anonymity because the process isn't public.
SEC Chairman Mary Schapiro said in an Aug. 3 statement that she asked her staff to hasten work "to require exchanges and other market centers to have specific programs in place to ensure the capacity and integrity of their systems." The agency expects to hold a public meeting with industry participants next month to talk about ways the SEC can better oversee trading technology, the person said.
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