Speech by SEC Commissioner:
Strengthening Equity Market Structure and Protecting Investors
Commissioner Luis A. Aguilar
U.S. Securities and Exchange Commission
SEC Open Meeting
November 3, 2010
This rulemaking is designed to address an issue of particular concern in today's equity market structure. As I noted when this rule was proposed, the extreme speed at which orders interact in the equity markets has led to trading systems engineered for the least possible delay. When you combine the competitive pressure for speed with the tight interrelationship of trading venues in our National Market System, you create a risk that mistakes, even mere sloppiness, can cause substantial harm to investors. In light of this, it is appropriate and necessary for the Commission to impose safeguards.
The rule we adopt today is designed to create an essential protection for the equities markets by requiring that every order transmitted to an exchange or alternative trading system first pass through a set of risk management controls designed to protect the markets from orders that are erroneous, exceed credit or capital limits, or fail to meet regulatory requirements. The need for such controls is clear, and I will vote to adopt today's proposal.
I join my colleagues in thanking the staff for their hard work on this measure to improve our markets and protect investors.