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SEC Chair calls for kill switch, other reforms for exchanges

A sign for the Securities and Exchange Commission (SEC) is pictured in the foyer of the Fort Worth Regional Office in Fort Worth, Texas June 28, 2012. REUTERS/Mike Stone

By Sarah N. Lynch

WASHINGTON (Reuters) - U.S. Securities and Exchange Commission Chair Mary Jo White said Thursday that exchanges will implement a series of reforms, including a kill switch to shut down trading, as a response to an August 22 software glitch that led to a three-hour trading halt in Nasdaq stocks.

White issued a statement discussing a series of reforms she hopes to see completed after meeting privately earlier this morning with the chief executives of the major exchanges, including Nasdaq OMX, New York Stock Exchange Operator NYSE Euronext, BATS Global Markets, Direct Edge and the Chicago Board Options Exchange.

Several exchange executives told reporters as they left the meeting in Washington, D.C., earlier Thursday that they have 60 days to complete their "homework."

In addition to a kill switch mechanism, White said she has also asked for exchanges to draft plans to address testing and disclosure protocols for securities information processors, or SIPs, which receives all traffic on quotes.

(Reporting by Sarah N. Lynch; Editing by Nick Zieminski)