Greg Slobodkin writes in his Fierce GovernmentIT article that Understaffed and outspent, the Securities and Exchange Commission is making an "unprecedented" investment in technology to protect investors and keep up with the fast pace and complexity of financial markets, says SEC Chairman Elisse Walter.
In a speech at the American University School of Law in Washington, D.C., Walter said the SEC's new Market Information Data Analytics System (MIDAS) and Consolidated Audit Trail (CAT) will collect vast quantities of public and non-public data about the market in order to level the playing field.
"These new tools are giving us the ability to examine the way our markets function with greater precision and detail than we have ever seen," said Walter. "They allow us to plumb routine filings for irregularities and aberrations that might signal illegal acts or suspect accounting."
In terms of investor protection, the SEC sees MIDAS as a system providing "dramatically better insight" into the function of the high-speed financial markets – information that regulators plan to share with the public. Although, how the commission plans on disseminating that data is still under evaluation by Walter's staff.
CAT, the SEC's other major technology initiative, is a market-wide effort requiring national securities exchanges and other self-regulating financial organizations to implement a system to significantly enhance the ability of the SEC to monitor and analyze trading activity.
Although details of the proposal are still under discussion, Walter said the new rules will require, among other things, that core technology of the exchanges, significant alternative trading systems and clearing agencies meet certain standards. And, she expects the rules will require that these entities conduct business continuity testing and that they provide certain notifications regarding systems disruptions and other events.