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| 2001 News and Press Releases |
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HEADLINE ARCHIVED:
US Market Is Forced To Review Infrastructure
By: P. Jones
The Financial News. Monday, October 15, 2001
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Excerpt: The stress that the terrorist attacks of September 11 put on the infrastructure that holds together the US securities industry is causing a big rethink in the US market. Last week the Securities Industry Association (SIA) considered pleas from US banks and brokers to delay a proposed shortened settlement cycle to T+1 by at least six months until 2005 in the light of the disaster. The banks say that recovery measures will occupy their time and budgets for the foreseeable future. The New York Stock Exchange has for the first time wondered whether it should have a back-up facility outside New York, and exchanges are considering speeding up the move to screen-based trading so that they no longer have to rely on one physical location. For a market that appeared to have one of the most sound infrastructures, it appears that there is still a lot of work to be done. Damon Kovelsky, an analyst at Meridien Research, a US consultancy which is instrumental in examining initiatives such as T+1, says: 'In examining the trading environment in the US following the September 11th attacks, we uncovered a glaring weakness in the technological infrastructure that supports the trading and settlement systems throughout the US.' Such weaknesses have been long ignored in the quest to lead the way on initiatives such as T+1. … Two weeks ago, the NYSE announced that it was beginning to address these issues. Richard Grasso, chairman and chief executive of the NYSE said that it would cost $150m (E166.6m) to build a back-up trading floor. The exchange is also in discussions with Nasdaq on how it could trade NYSE securities if access to the NYSE floor should again be disrupted.
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