January 17, 2017 / 9:00 PM / 3 years ago

Thesys to run massive U.S. securities markets trade depository

A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, U.S., October 24, 2016. REUTERS/Shannon Stapleton

NEW YORK (Reuters) - Thesys Technologies LLC has been chosen to build and run a massive stock and options trading database ordered by the U.S. Securities and Exchange Commission aimed at helping regulators police the increasingly fast, fragmented and complex markets.

Thesys was selected in a vote by all U.S. stock and options exchanges, including Intercontinental Exchange Inc’s New York Stock Exchange, Nasdaq Inc, and Bats Global Markets, as well as the Financial Industry Regulatory Authority, the group said in a statement on Tuesday.

An SEC spokeswoman declined to comment.

The creation of a Consolidated Audit Trail (CAT) establishes a regulatory central database for every trade order, execution, modification and cancellation, as mandated by the SEC in July 2012.

The SEC has said the CAT will help it better address market disruptions by more efficiently tracking trading across stock and options markets, increasing the ability to spot and investigate market misconduct and improving the effectiveness of market research.

Billions of shares trade every day at near light speed and a large imbalance or glitch in the mostly automated markets can quickly snowball into a major problem.

The CAT became a priority for the industry after the so-called flash crash in 2010, which wiped out about $1 trillion from the stock market within minutes before an almost equally rapid rebound. It took regulators months to piece together the data needed to attempt to diagnose what caused the event.

Now that the CAT plan processor has been selected, the exchanges have a year to begin sending in data to the repository.

Reporting by John McCrank; Editing by Bill Trott

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