NYSE And NASDAQ To Have Each Other's Backs In The Event Of An Emergency

Earlier this month, financial markets in the US were roiled after the New York Stock Exchange was forced to shut down trading for several hours due to a technical glitch. The event rocked investors' confidence and led many to question whether or not markets' heavy reliance on technology was such a good thing. Since then, regulators have been working on a way to ensure that big exchanges have a back-up plan in case something like this happens again.

Both the NYSE and the

Wednesday that they were working on a plan that will allow the two exchanges to back each other's closing auctions. That means that if the NYSE, NYSE Arca or NYSE MKT face a glitch that prevents a closing auction, the NYSE will use the NASDAQ's closing prices as a backup and vice versa.

The new framework is expected to restore investors' confidence in the technology that powers share markets after several glitches chipped away at their reputations this year. The system will help maintain reliable closing prices to give regulators, investors and other market participants a reliable way to manage investments in the case of an emergency.

The two exchanges are expected to file their proposal with the Securities Exchange Commission, after which market participants will be allowed to comment on the deal with their own input. If the new rules are passed, the exchanges will likely release more information regarding the framework and schedule testing days to ensure the system works.