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.