Aug 08, 2012
Knight to resume NYSE market making after software slip
Following the temporary suspension of Knight Capital Americas' market
making activities from NYSE Euronext after a US$440
million software glitch, the exchange will return the broker’s responsibilities Monday
13 August.
On 6 August, Knight was forced to transfer custodial responsibility for the 524 NYSE and 156 NYSE MKT listed securities in which it providers designated market making (DMM) services for to fellow electronic market maker
GETCO’s DMM unit
“Knight and GETCO have demonstrated outstanding commitment
and leadership in serving the best interests of investors, our listed issuers
and market stability,” said Larry Leibowitz, COO, NYSE Euronext. “We applaud
the teamwork and collaboration by all parties involved to ensure smooth,
efficient and seamless transitions.”
The 1 August glitch sent numerous
erroneous orders in NYSE-listed stocks into the market, more than tripling the
average number of shares traded at the start of trading to over 300 million and
causing price fluctuations that led NYSE Euronext to bust trades in six stocks, following a review of 148
symbols.
As a result, the firm was forced to recapitalise following
the trading error. Knight Monday completed a US$400 million equity financing
agreement with a consortium of new investors including GETCO, broker Jefferies, investment firm Blackstone and retail broker TD Ameritrade.
Bruce Love
+44 (0)20 7397 3818
bruce.love@thetrade.ltd.uk