Compliancex

The Securities and Exchange Commission would require trading firms and other market participants to disclose system failures and test computer-code changes before they go live under rules being developed in light of the software glitch that forced the $400m bailout of Knight Capital, people familiar with the matter said.

The Knight fiasco is the latest in a series of technological failures – ranging from the “flash crash” of 2010 to the software problem that marred Nasdaq’s handling of the Facebook initial public offering in May – that have eroded investor confidence in US markets and increased pressure on the SEC to tighten its rules for trading systems.

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