The Securities and Exchange Commission today announced that its market technology roundtable, which was scheduled for Sept. 14, will be held on Oct. 2. The change was made to accommodate scheduling conflicts and to better respond to strong interest from individuals and groups wishing to participate in the roundtable discussion.
The roundtable at the SEC’s Washington, D.C. headquarters is open to the public and will be webcast. As previously announced, the event will begin with a discussion on preventing errors, focusing on current best practices and practical constraints for creating, deploying, and operating mission-critical systems, including those used to automatically generate and route orders, match trades, confirm transactions, and disseminate data. The afternoon session will focus on error response, with experts discussing how the market might employ independent filters, objective tests, and other real-time processes or crisis-management procedures to detect, limit, and possibly terminate erroneous market activities when they occur, thereby limiting the impact of such errors.
Market Technology Roundtable Agenda
Panel 1 – Preventing Errors through Robust System Design, Deployment, and Operation
What are current best practices for ensuring adequate testing, robustness, deployment, and use of software systems? How do business objectives impact technology decisions? How do market participants balance speed-to-market against the need for extensive testing, or the costs of additional redundancy and safeguards compared with the potential benefits of innovation and rapid development?
What level of robustness is expected by the market? What is needed? Are there acceptable rates of errors? What levels are practical or achievable? How do firms test their system for capacity, contingencies, and other unexpected circumstances? How is scenario testing performed? Who determines what types of operational risk scenarios a system must be able to withstand?
What is the role of independent parties in testing or certifying the many aspects of a robust software development life cycle?
What additional role, if any, might further or different regulations play in these processes?
Panel 2 – Responding to Errors and Malfunctions and Managing Crises in Real-Time
What are best practices for managing and containing errors when they do occur? How do firms monitor for “unforeseen” problems? What types of technologies or processes would allow for real-time identification of issues and intervention? What are some specific types of real-time testing used today by market participants to monitor for potential erroneous activity? Are there tests for capital, margin, and credit? What is the role of independent real-time monitoring or filtering by other parties (e.g., exchanges filtering participant activities)?
Can responses by automated? Who has the authority to perform real-time corrective actions? Are there ways to automatically terminate erroneous activity? How would such activity be identified in real-time?
Are there gaps in market “safety nets” that should be addressed? What are the potential market implications for increasing safety nets? Would additional tests and filters slow access to the markets? How should the market balance the potential for improved stability against the impact and costs of additional filters? What are the considerations for investor confidence, investor protection, capital formation, and market efficiency?