SEC to Host Tech-Focused Rountable

The US Securities and Exchange Commission (SEC) has announced that it will hold a roundtable meeting on the use of technology in capital markets, following the recent incident at Knight Capital.

The regulator will hold the event next month, which is aimed at examining stability in markets that utilize highly-automated trading strategies. It will aim to examine the control systems in place for containing errors in algorithmic trading, which the SEC says can have wider effects within a market, and that errors aren't simply contained to one firm.

The announcement follows the highly-publicized software glitch at broker Knight last week, which resulted in hundreds of millions of dollars in losses. The market-maker was eventually bailed out by a consortium of interested parties, following marked concern over the potential ramifications of a total collapse by the firm. The rescue resulted in the restoration of Knight's market-maker status by the New York Stock Exchange earlier this week.

"Reliance on technology has enabled the markets to achieve extraordinary levels of speed and efficiency," says SEC chairman Mary Schapiro. "But with technology comes a responsibility for getting it right, minimizing errors and protecting the interests of investors."

The move by the SEC is the latest in a series of educational exercises by national regulators. Its sister organization, the Commodity Futures Trading Commission (CFTC), has held a number of meetings through its Technology Advisory Committee, composed of regulators, experts and market participants, to define the use of technology in the market and better-inform future oversight.

Reliance on technology has enabled the markets to achieve extraordinary levels of speed and efficiency, But with technology comes a responsibility for getting it right, minimizing errors and protecting the interests of investors.