CNBC's Gasparino: SEC Looks at NYSE's Handling of Trading

The Securities and Exchange Commission is looking into whether the New York Stock Exchange's so-called hybrid trading system has enough capacity to handle the high volume that has occured this week, according to CNBC's Charlie Gasparino.

Earlier in the day, NYSE head John Thain, responding to a Wall Street Journal story, told CNBC that there is no SEC investigation of trading problems at the the Big Board during Tuesday's market selloff.

Gasparino said that although the SEC hasn't issued subpoenas, taken depositions or had its enforcement division conduct the probe, it is looking at the matter through its market surveillance unit.

Gasparino said he'd obtained a statement from SEC spokesman John Nester that said: "SEC staff is working closely with the NYSE and other market center to review Tuesday's events to evaluate how orders were handled and whether any enhancements to capacity management are necessary."

Gasparino said the SEC is aware that the Big Board, a public company, may want to minimize the problems in its trading system. The SEC will be asking questions and monitoring the NYSE's own examination of what went on to make sure the hybrid system, which uses both electronic and human traders to execute transactions, isn't fundamentally flawed as some suspect.

Meawhile, Duncan Neiderauer, who was recent appointed president of the NYSE, plans to meet with a group of specialists when he takes over in April, Gasparino said. Many floor specialists have been laid off in the move to electronic trading, which may have contributed to the delays during Tuesday's trading, Gasparino said.

Over the past year or so, NYSE Group has shifted much of its trading away from its floor and onto an electronic platform, a move that many investors have embraced because it promises faster execution times in a business where time is money, the
paper said.



  • The Marriner S. Eccles Federal Reserve building in Washington.

    CNBC's Fed Survey shows market pros aren't very confident the Fed can end its easy money polices without a market crash, a recession or bad inflation.

  • Merck employees walk past a Merck sign in front of the company's building in Summit, New Jersey.

    Merck reported better-than-expected results, with sales of newer drugs offsetting declining sales of drugs facing generic competition.

  • Pfizer reported higher-than-expected second-quarter earnings, helped by growing sales of its cancer medicines.

  • An attendee is silhouetted against a Microsoft poster at the Microsoft Developers Build Conference in San Francisco, April 2, 2014.

    An agency that enforces antimonopoly laws visited company offices in four cities, as the country more closely scrutinizes multinational companies.

Contact U.S. News


    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video