SEC staffing
April 25, 2013 7:17 AM Subscribe
Does the US Securities & Exchange Commission have computer scientists on staff who can parse trading algorithms? Or is its staff primarily lawyers and accountants?
This question arose in the context of talking with a friend about the sudden and temporary crash in the stock markets earlier this week when a Reuters Twitter account was hacked and a false tweet about explosions at the White House was sent out.
We were speculating whether the SEC has the ability to parse and understand traders' algorithms.
Thanks for any insight anyone has.
This question arose in the context of talking with a friend about the sudden and temporary crash in the stock markets earlier this week when a Reuters Twitter account was hacked and a false tweet about explosions at the White House was sent out.
We were speculating whether the SEC has the ability to parse and understand traders' algorithms.
Thanks for any insight anyone has.
Best answer: They do. I have a relative who works for the SEC that is neither a lawyer or accountant. He is a former trader. They have hired both industry professionals to look at trading from that perspective and they have hired a lot of programmers. Look at the USA job filings for the SEC.
posted by JohnnyGunn at 7:31 AM on April 25, 2013
posted by JohnnyGunn at 7:31 AM on April 25, 2013
Best answer: Here's one relevant job listing. That's in the exam division, but there's also the SEC's Division of Risk, Strategy, and Financial Innovation, which is sort of think-tanky.
I've never been witness to an actual SEC exam, but my understanding is regardless of whether they have someone on staff who could have created your algorithm, they'll make you explain exactly how it works to them until they understand it (or at least feel like they understand it). And it's certainly in your best interest to make sure they understand it, given that the default (with good reason) is if I can't understand it, it's surely bad. And the SEC has lots of smart people! Much love to the SEC.
posted by Admiral Haddock at 7:31 AM on April 25, 2013
I've never been witness to an actual SEC exam, but my understanding is regardless of whether they have someone on staff who could have created your algorithm, they'll make you explain exactly how it works to them until they understand it (or at least feel like they understand it). And it's certainly in your best interest to make sure they understand it, given that the default (with good reason) is if I can't understand it, it's surely bad. And the SEC has lots of smart people! Much love to the SEC.
posted by Admiral Haddock at 7:31 AM on April 25, 2013
Best answer: Here is a job posting from the middle of 2012 for "Quantitative Research Analysts (Financial Engineer)" and here is a news article about the Quantitative Analytics Unit.
posted by knapah at 7:32 AM on April 25, 2013
posted by knapah at 7:32 AM on April 25, 2013
Response by poster: Thanks, these answers were exactly what I was looking for.
posted by dfriedman at 7:35 AM on April 25, 2013
posted by dfriedman at 7:35 AM on April 25, 2013
Just to note, it was Associated Press whose Twitter was hacked, not Reuters (at least not yet).
posted by payoto at 7:37 AM on April 25, 2013
posted by payoto at 7:37 AM on April 25, 2013
Best answer: I have been in an SEC exam where they ask you all about your trading strategies. They will ask questions and ask for a description in writing. I assume that was so they could take it back to their experts and let them have a go at it. This applies for both automated strategies as well as manual ones.
posted by JohnnyGunn at 7:49 AM on April 25, 2013
posted by JohnnyGunn at 7:49 AM on April 25, 2013
This thread is closed to new comments.
posted by Tomorrowful at 7:29 AM on April 25, 2013