An academic article was published in June on the day when the glitch happened effecting retail trades. 3 months later shown below In March 2001 The “Execution Quality Disclosure Rule,” which requires both market centers and brokers to provide order execution statistics and information on order routing, in part to address concerns about the effect of payment for order flow on prices paid by retail investors.
On April 9, 2001, the SEC then announced Regulation National Marketing System (RNMS) and mandated that the stock market move to decimal pricing. On January 8, 2002, Knight agreed to pay $1.5 million to settle multiple NASD regulatory violation claims including failure to honor posted quotes, the improper display of limit orders, and slow, sometimes inaccurate reporting of thousands of trades to the NASD. The regulatory fine was $700,000, and its clients were paid $800,000. The NASD investigation also highlighted the existence of and executive knowledge of front-running within Knight, a Wall Street practice in which firms traded for their own accounts based on previewing customer order flow and executing their own trades before a customer’s order.
Knight was much later aquired by Citadel.
NYSE calls time out June 8, 2001: 12:52 p.m. ET The software glitch allowed institutional trades to be processed, but retail trades could not, and Grasso said, “Half of our floor was not receiving electronic traffic, and we thought that was not fair.”
You must log in or register to comment.