January 2, 2014

Taking Stock

Nasdaq CEO Bob Greifeld opens up about his plans for ensuring the integrity of the market's infrastructure after some notable technology mishaps.

By By Peter Chapman

Peter Chapman

In the wake of the Aug. 22 Disruption to the Securities Information Processor run by Nasdaq and the subsequent order from Securities and Exchange Commission Chairwoman Mary Jo White to the nation's exchanges that they formulate a plan to strengthen the integrity of the exchange network, Nasdaq OMX CEO and president Bob Greifeld has been addressing industry and shareholder concerns about the problem. This fall the exchange head discussed the issue with analysts on a quarterly earnings call. Two weeks prior, he addressed attendees at the Investment Company Institute's annual market structure conference. Traders excerpts some of his comments on what changes are being made inside Nasdaq and the changes the capital markets must address.

ON MAKING IMPROVEMENTS TO THE SECURITIES INFORMATION PROCESSOR.

BOB GREIFELD: In the technology business, there will always be latent bugs in the code. It's our job to basically isolate them and make sure that when they happen, they don't have an impact on the world. So coming out of Aug. 22, there's obviously a lot of things we have to do with respect to the SIP and how it works in the environment. I think that represents, in certain ways, an opportunity for our technology business to put forward a state-of-the-art proposal for the SIP committee to get it up to world standards. We intend to pursue that. I think under Mary Jo's leadership, the industry itself is starting to grapple with what we have to do to live in this interconnected world.

Bob Greifeld

ON THE SEC CHAIRWOMAN'S SEPT. 12 REQUEST FOR A PLAN OF ACTION FROM THE EXCHANGES.

GREIFELD: The 60-day clock is ticking. I think it comes up the 12th of November. And we intend to be ahead of the curve in terms of how we respond to that. So we're excited about that.

ON A NEW TESTING REGIME.

GREIFELD: It's our strong feeling the industry has to evolve to some type of centralized testing regime. And we certainly referred to the telecom industry and others, where you have the equivalent of an underwriters' laboratory that represents your ability to do nonsequential testing that assures the safety and sanctity of the entire network.

ON THE COSTS AND BENEFITS OF OPERATING THE SIP.