Securities Industry: Additional Testing Needed to Ensure Efficient Post-Trade Processing of Stocks
IMTEC-90-83
Published: Sep 26, 1990. Publicly Released: Sep 26, 1990.
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Highlights
Pursuant to a congressional request, GAO provided information on: (1) stock exchanges' automated systems for correcting problem trades more expeditiously; (2) the extent to which exchanges tested those systems to ensure that they could process increased work-load volumes; (3) the impact of those systems on reducing the 5-day period needed to clear and settle stock trades; and (4) the Securities and Exchange Commission's (SEC) role in reviewing and approving those systems.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Securities and Exchange Commission | The Chairman, SEC, should ensure that the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, and the National Securities Clearing Corporation conduct complete stress tests to demonstrate that their trade comparison and correction systems can handle increased work loads anticipated during peak trading periods. |
SEC hired technical expertise within its newly formed automation review group to strengthen the Commission's oversight of market system testing. However, it did not have the market entities in the review conduct complete stress tests of their systems.
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| United States Securities and Exchange Commission | The Chairman, SEC, should ensure that all organizations follow structured systems development practices when developing automated systems. |
SEC intends for its newly formed automation review group to ensure market organizations follow structured systems development practices. However, concerns remain regarding exactly how this group will be used. GAO is continuing to monitor SEC progress in this area under another job code (510618).
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Data transmissionIndependent regulatory commissionsInformation systemsInternal controlsSecurities regulationStock exchangesStocks (securities)Systems testingSecuritiesSecurities industry