Federal regulators signaled yesterday that they may more strictly oversee the high-speed trading that’s come to dominate financial markets and impose risk controls in response to a series of market-disrupting technology glitches, the Washington Post reported today. The 137-page “concept release” from the Commodity Futures Trading Commission (CFTC) comes at a time when regulators are struggling to cope with a technological revolution that has transformed trading from a human-centric endeavor to one driven by computers that execute orders at blink-of-an-eye speeds — sometimes with disastrous results. One of the most harrowing was the May 2010 “flash crash,” when the stock market plunged nearly 1,000 points in minutes, then whipped back up. Other high-profile glitches ensued, including the runaway trades linked to faulty computers at Knight Capital last year. Technical problems halted trading in Nasdaq-listed stocks for more than three hours two weeks ago, an issue that the exchanges have been summoned by the Securities and Exchange Commission to discuss Thursday.
