SEC Chairman Mary Schapiro said her agency has yet to pinpoint the reason for the sell-off that sent the Dow Jones industrial average falling nearly 1,000 points in less than half an hour.
"We will move as quickly as we can, but I can't give you a final date," Schapiro said at a hearing examining the historic market drop.
Some causes have been ruled out, she said. The agency's review found no evidence of terrorist activity or computer hacking. There also was no evidence "that this was done in any kind of a malicious way," Schapiro said.
Schapiro said establishing a stronger system for slowing trading during periods of high volatility would help.
Six major U.S. securities exchanges on Monday agreed in principle to a uniform system of "circuit breakers," which could slow trading during sharp market swings.
Most of the 50 U.S. exchanges regulate themselves and design their own tools for slowing or halting trading.Reforms needed
Lawmakers and Schapiro acknowledge that the plunge has undermined confidence in the financial markets.
"We must quickly analyze what happened and embrace reforms in order to restore market integrity and promote investor confidence," said Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services subcommittee that oversees market regulation.
Last week's market freefall highlighted the growing complexity and diversity of the securities market. Upstart electronic trading platforms now compete with the traditional exchanges, and powerful computers give traders a split-second edge in buying or selling stocks.
The plunge also underscored the growing importance of options trading, which allows investors to trade based on expectations for a particular stock, or group of stocks, to rise or fall, rather than simply trading the underlying stock.
"The interconnections among markets ... have grown immensely more complex over the past few years," Schapiro told the subcommittee. "Orders in one stock directed to one market can now ricochet to other markets, and trigger (mathematical) executions in other stocks and derivatives in milliseconds."