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NYSE’s Leibowitz Says Centralized Audit Trail Is ‘Critical’

Oct. 14 (Bloomberg) -- Regulators should proceed with plans to collect and store data on all U.S. securities trading, an initiative that is “absolutely critical” to keeping markets fair, NYSE Euronext’s chief operating officer said.

After the May 2010 crash that erased $862 billion in 20 minutes, the Securities and Exchange Commission and stock markets implemented circuit breakers last year to prevent volatility in individual companies from spreading throughout the market. The SEC said this year that it might mandate a system that limits moves in securities prices.

“Limit-up and limit-down, that solves some of the problem, but in my view that’s not enough,” Larry Leibowitz, the chief operating officer of the New York Stock Exchange’s owner, said at a Society of American Business Editors and Writers conference in New York today. “The SEC proposal to create centralized audit trail is absolutely critical so we can say someone is surveilling across all markets,” he said. “It’s our job as an industry and the exchanges in particular to stand up for transparency and integrity.”

Regulators and exchanges are reviewing plans to improve surveillance of trading activity after the rout on May 6, 2010. Leibowitz said today that the so-called flash crash was a “crystallization of the problems that had been occurring in the marketplace for years.”

To contact the reporters on this story: Whitney Kisling in New York at wkisling@bloomberg.net; Joanna Ossinger in New York at jossinger@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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