Direct Edge Adds Kill Switches Inside Exchange Software
December 3, 2012
Brokerage executives have expressed concern about ‘kill switch’ mechanisms coming from the stock exchanges that might not give them enough time to react to changing market consitions..
"We worry about automation kicking in at the wrong time and perhaps destabilizing the system," TD Ameritrade chief technology officer Lou Steinberg warned participants at the SEC’s roundtable.
But Christian points out that, in the Direct Edge case, it is the brokers who set the parameters on the kill switches, not the exchange.
"Kill switches need to be part of multiple layers," of protections, Nasdaq OMX Group chief information officer Anna Ewing also said at the roundtable. "We need to ensure we don't think of it as the Big Red Easy Button. It's layered. It's complex.’