Exchange, Brokerage Officials to Attend SEC Roundtable

09/28/2012| 11:22am US/Eastern

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    By Jacob Bunge 
 

Operations and technology officials from the biggest U.S. stock exchanges and trading firms next week will detail ways to prevent automated trading programs from running wild, according to a notice from the Securities and Exchange Commission.

Market operators NYSE Euronext (>> NYSE Euronext), Nasdaq OMX Group Inc. (>> NASDAQ OMX Group, Inc.), BATS Global Markets Inc. and Direct Edge Holdings LLC will send officials who oversee exchange functions to the daylong roundtable meeting, according to the SEC's Friday notice.

The event also will host technology and trading experts from UBS AG (UBS, UBSN.VX), Citadel LLC, TD Ameritrade Holding Corp. (>> TD Ameritrade Holding Corp.), Investment Technology Group Inc. (>> Investment Technology Group) and Getco LLC, brokers and traders that are central to the billions of shares that trade across U.S. markets daily.

The SEC planned the Oct. 2 meeting following the Aug. 1 trading debacle at Knight Capital Group Inc. (>> Knight Capital Group Inc.), a chief trader with retail brokerage firms that was forced to seek rescue funding after rogue software drove a $440 million loss.

Knight has retained International Business Machines Corp. (>> International Business Machines Corp.) to review the matter. Christopher Rigg, a partner at IBM, will attend next week's roundtable, according to the Friday notice.

Alongside securities industry officials the SEC will draw academics from the Massachusetts Institute of Technology and Bentley University. The SEC also invited Dave Lauer, who worked for high-frequency trading operations in Chicago before joining an Internet startup and airing criticisms of the business.

The meeting comes as the SEC this month has embarked on a wide-ranging review of the way broker-dealers manage their trading systems and respond to malfunctions in response to the Knight mishap, which raised fears of larger-scale market damage that could be caused by misbehaving computer programs.

Write to Jacob Bunge at jacob.bunge@dowjones.com

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