The staffs of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) released a joint report Friday which detailed their findings regarding the market events of May 6, 2010, also known as the “Flash Crash” because of its speed and severity.
“We appreciate the incredible effort of all the professionals at both agencies who have worked tirelessly, scouring the data, interviewing market participants and reconstructing the events of May 6,” Schapiro said in a statement. “This report identifies what happened and reaffirms the importance of a number of the actions we have taken since that day. We now must consider what other investor-focused measures are needed to ensure that our markets are fair, efficient and resilient, now and for years to come.”
Rep. Paul Kanjorski , D-Pa., the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises also chimed in.
“The SEC and CFTC report confirms that faster markets do not always lead to better markets,” Kanjorski said. “While automated, high-frequency trading may provide our markets with some benefits, it can also carry the potential for serious harm and market mischief. Extreme volatility of the kind we experienced on May 6 could happen again, as demonstrated by the volatility in individual stocks since then. To limit recurrences of that roller-coaster day and to bolster individual investor confidence, our regulators must expeditiously review and revise the rules governing market structure. Congress must also conduct oversight of these matters and, if necessary, put in place new rules of the road to ensure the fair, orderly and efficient functioning of the U.S. capital markets. The CFTC-SEC staff report will greatly assist in working toward these important policy goals.”