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SEC says flash crash report will bring confidence
NEW YORK |
NEW YORK (Reuters) - The upcoming flash crash report will show that regulators have a "very deep understanding" of the marketplace, giving the public a measure of confidence, the head of the Securities and Exchange Commission said on Monday.
"It will paint a very clear picture of how the markets operated on that day," SEC Chairman Mary Schapiro said in an interview, adding she expects regulators will issue the report "in the next several days."
The May 6 crash knocked some 700 points off the Dow Jones industrial average before it sharply rebounded, all in about 20 minutes. No full explanation of the unprecedented breakdown has yet been given, stirring concerns among investors about the stability of the high-speed electronic marketplace.
"I think they will feel confident, and they'll feel confident that the SEC and the CFTC staffs have a very deep understanding of the markets as a result of this inquiry, and that we have some ideas on how to go forward," Schapiro said in the interview with Reuters Insider.
Funds have exited mutual fund accounts in every week since the crash, according to data to the beginning of this month, fueling speculation that the crash continues to undermine investor confidence. Earlier this month, Schapiro said that trend was "troubling."
Schapiro said on Monday she still hopes the SEC and the Commodity Futures Trading Commission will issue the joint report this month.
The report is intended to lay the groundwork for a special commission to make rule recommendations -- a process Schapiro said should not take too long. "These are important issues, they're very much front and center for us right now," she said.
The SEC is dealing with the flash crash at the sometime that it begins to write the 100 some rules required by the landmark U.S. Wall Street reform legislation, signed into law this summer.
(Reporting by Jonathan Spicer, Editing by Leslie Gevirtz, Carol Bishopric and Bernard Orr)
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