Equally important is for all market centers to start using high-resolution, synchronized clocks for time-stamping messages. The CFTC TAC HFT Subcommittee in its October 2012 report made this same point, calling it “critical to reconstructing and sequencing market events,” but lamented that then current methods of clock synchronization were insufficient for these pur poses. Without attempting to argue whether or not that was true at the time, it is certainly no longer the case. Technology is readily accessible for synchronizing to the microsecond, and there is no excuse for not having this in place today. Without it, this surveillance system will suffer the same shortcomings as current systems such as OATS, where aggregation and sequencing is rendered impossible by timestamp resolution and the lack of any clock synchronization. A simple call to a firm such as FSMLabs will quickly and cost effectively solve this issue.
Testimony of David Lauer
President and Managing Partner, KOR Group LLC
Testimony on “The Role of Regulation in Shaping Equity Market Structure and Electronic Trading”
The Committee on Banking, Housing, and Urban Affairs
July 8, 2014