- Oct
- 23
- 2008
- 3:04 PM
'Exchanges To Tackle Erroneous Trades Issue'
- By: Ray Pellecchia
- File Under: NYSE, NYSE Arca
Here is welcome news for the trading community: Exchanges to Tackle Erroneous Trades Issue (TraderMagazine.com) Excerpt:
The major exchanges, in the wake of trading snafus in recent weeks, vowed to work together to craft and synchronize policies targeting error trades. ...
Behind the decisions are complaints by broker-dealers and the STA over a lack of uniformity in exchange policies covering error trades and a need for exchanges to act as one National Market System on the issue. ...
Brokers’ complaints follow a particularly bad day on Sept. 19, when tens of thousands of trades were pulled from the tape because they were considered erroneous.
“We will collectively work together to make it better,” Joe Mecane, an NYSE Euronext executive vice president and chief administrative officer of U.S. Markets, told the crowd. “And we have been working collectively at the exchange level to try to sync up our erroneous policies so at least there’s a common application.”
Why is this important? You can probably say it better than me, but my understanding is that if trades are to be broken, traders of course need to know that ASAP, so they can assess and address any risk exposur they and their customers face because of the busted trades. It therefore makes sense to have a harmonized approach that helps these decisions be made quickly and consistently across markets.
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