The investigative arm of Congress criticized securities regulators and the National Association of Securities Dealers for their oversight of Nasdaq Stock Market outages, The Wall Street Journal reported Friday.
Nasdaq experienced several problems last summer that caused the screen-based trading system to shut down temporarily.Those problems included installation of new software, defective hardware attached to the system's mainframe computer, and a squirrel that bit through a power line at the main Nasdaq operations center in Connecticut.
The General Accounting Office, in a report requested by lawmakers following outage problems, also made recommendations about how the Securities and Exchange Commission and the NASD should handle similar problems in the future.
The NASD runs and oversees the Nasdaq and is subject to SEC oversight.
The GAO's recommendations included expanded testing of market systems and assessing the existing system to identify weaknesses.
NASD also should avoid making software changes on days when trading may be volatile and should correct weaknesses in contingency and disaster plans, the GAO said.
NASD spokesman Bob Ferri said several of the recommendations contained in the GAO report already have been addressed.
He said that Nasdaq has been down only three times in its 23 years, and that the Ernst & Young accounting and consulting firm recently found that "Nasdaq has implemented an excellent software quality assurance program."