Options exchanges in the US were last week bracing for a
regulatory probe into the industry as part of the fallout from
investigations into stock market specialist practices and
Securities and Exchange Commission (SEC) officials said
directly during the Options Industry Conference in Phoenix last
month - that self-regulatory organisations - meaning exchanges,
are falling under more intense scrutiny.
Phildalphia Stock Exchange (PHLX) ceo Sandy Frucher said SEC
has asked US securities and options exchanges to perform a
"harm assessment" of trades stretching back five years. His
exchange is complying with the SEC request but said it is
coming at a steep price. PHLX has spent $250,000
just for the extra data storage of every trade handled for
past five years. Other exchanges declined to comment on the SEC
request, although an executive from International Securities
Exchange (ISE) said it was not asked for such data.
Frucher said it is not considered an official investigation
"but they have considerably upped the volume and the nature of
the audits that they are doing."
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