SEC Calls for Kill Switches Post-Nasdaq Outage

White called for the implementation of "kill switches" to allow exchanges to shut down trading in the event of technological failures in order to review and consider other potential risk mitigation mechanisms.

"I stressed the need for all market participants to work collaboratively—together and with the Commission—to strengthen critical market infrastructure and improve its resilience when technology falls short," says White. "To that end, I asked those at the meeting to work constructively with the Commission staff as we continue to consider ways to enhance the integrity of market systems."

Those present at the meeting, including leaders from Financial Industry Regulatory Authority (Finra), the Depository Trust and Clearing Corp. (DTCC), and the Options Clearing Corporation (OCC), along with other market participants, will be tasked with providing the industry with comprehensive action plans to establish and assess highly resilient and robust systems for the securities information processors (SIPs)—which consolidate and disseminate prices—including testing standards and disclosure protocols.