Backup plans are tough….
Closing the stock exchange for two days and having a major market maker (Knight Capital) shut down on the first day back (yesterday) was not Wall Street’s idea of a smooth hurricane Sandy.
That’s why, according to the Financial Times, people on the Street have started figuring out what went wrong and pointing some fingers at sections of the community that should have been more ready.
And it looks like the SEC will have to have something to say about all this.
First, let’s get to the problem biggest problem, closing the exchanges.
Larry Lebowitz, the COO of NYSE Euronext told the FT that even if he had kept the exchange open, the securities community wasn’t ready to trade totally electronically. Their backup system, something called Arca, hasn’t been implemented industry-wide.
Some firms even needed to rewrite code during the storm to get their trading programs up to snuff, which is dangerous.
Then there’s what happened when major market maker, Knight Capital, had to shut down for the day because of a failed backup generator.
Bottom line: The last thing Wall Street needs is any perception of more problems with its electronic platforms. The SEC is already starting to look into market structure more, and that aside, after September 11th, Wall Street had emphasized being able to work remotely.
So we can expect people to be talking about this for a while.
See on www.businessinsider.com
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