After Thursday’s software glitch at CBOE, the exchange’s executives are trying to piece together what happened and move forward from the fallout.
According to MarketWatch.com, analysts have estimated that the incident could have cost CBOE Holdings Inc. (NASDAQ:CBOE)?$700,000 in revenue as well as a decline in its average market share for U.S. options trading.?
CBOE executives returned to Chicago on Friday from the Options Industry Conference to review the situation and the trading day on the exchange was business as usual.
The outage isn’t the first one for the industry as NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) endured one last year with the Facebook IPO as well as the BATS Global Markets and the Knight Capital Group, Inc. mishaps.
In a Wall Street Journal piece on Friday, “What You Need to Know About Regulation SCI,” it noted that?Securities and Exchange Commission regulators had been monitoring CBOE’s situation on Thursday and will now begin a review on what caused the shutdown.?
SEC examiners will utilize the new agency rule referred to as Regulation SCI, the abbreviated name for Systems Compliance and Integrity. According to the SEC, this requires ?certain key market participants to have comprehensive policies and procedures in place surrounding their technological systems.??
At issue is whether or not CBOE’s glitch had been a result of careless ?policies and procedures? over the management of its technology. Regulators are also reviewing Knight’s trading glitch and trying to determine if the firm had done enough self-policing of its trading systems prior to computer errors almost taking its firm out of business.?
As noted by the Wall Street Journal, the new reality is these exchanges and firms are becoming technology companies and now it’s time for regulators to catch up to this world.?
Until then, look for more disruptive glitches.?