(By Stephen Foley and Arash Massoudi in New York)
The Securities and Exchange Commission is hopelessly outgunned in resources and technical savvy by the computerised traders it regulates, a leading US senator has warned ahead of a hearing into recent stock market glitches.
Senator Jack Reed said a hearing set for Thursday will be the first in a series investigating whether the market structure created by the SEC contributed to the near failure of Knight Capital and the botched flotations of Facebook and BATS Global Markets. It will also examine whether some high-frequency traders have an unfair advantage.
“Technological innovation is such that the tech can change every six months, so we have to make sure we are prepared,” said Mr Reed, “and I don’t think that the SEC has the resources, the skilled personnel or the latest technology.”