Gary Gensler, the head of the CFTC, is also testifying in the House of Representatives on the cause of last Thursday's plunge. The main points of his testimony:
1) futures had a much tighter bid-ask spread than the comparable ETF.
2) the exact cause of the plunge remains elusive
3) the CFTC is focused on on traidng in the S&P E-Mini futures contracts just prior to 2:40 PM ET that Thursday;
4) they are examing the top ten largest longs and top ten shorts in that contract.
Mary Schapiro, the head of the SEC, has also released her testimony:
1) No single event caused drop
2) No evidence of "fat fingered errror"
3) No unusual trading in Proctor & Gamble before the plunge
4) SEC considering "greater consistency in exchange practices" (i.e., uniform circuit breakers).
The two points around which agreement seems to be coalescing:
1) there was an unusual amount of sell-side volume in the S&P E-Mini contract just prior to 2:40pm ET, and
2) the lack of a uniform individual stock circuit breaker was an exacerbating factor in the decline.
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