Months after a system crash caused an hours-long shutdown of the Nasdaq, the Securities Industry and Financial Markets Association is urging reforms, suggesting that more transparency—and fewer bottlenecks—are needed.

When a significant portion of the U.S. stock market, the tech-stock-heavy Nasdaq, went down for three hours on August 22, it raised big questions about the systems that keep the stock exchanges humming.

An association with a major interest in the future of the market says now is the time to upgrade not only the systems, but the underlying processes. More details:

What happened: For three hours around midday on August 22, the all-electronic Nasdaq stock exchange stopped trading due to technical issues. The shutdown affected nearly 3,200 stocks, including those of major tech companies such as Apple, Google, and Facebook. A week after the incident, Nasdaq detailed what caused the problem: a flood of data that slammed its Securities Information Processor (SIP), rendering it useless. While other factors played a role, the exchange said that at the time of the shutdown, it was receiving as many as 26,000 stock quote requests per second from a single source: the NYSE Arca exchange. Securities and Exchange Commission (SEC) Chairwoman Mary Jo White asked the exchanges to come up with reforms to help prevent similar gaffes in the future.

SIFMA speaks up: With the SEC already urging reforms, the Securities Industry and Financial Markets Association (SIFMA) is using the opportunity to push for sweeping changes to the current SIP system, which was implemented more than 30 years ago. “In today’s markets, the current system suffers from a lack of transparency and competition, questions of underfunding, and insulated governance,” SIFMA Managing Director Theodore R. Lazo wrote in a December 5 letter to White [PDF]. “We believe the time is ripe for reconsidering how the SIPs are governed, controlled, and operate under the commission’s oversight.”

More competition needed? Among other things, SIFMA is pushing for a diversification of processors. Currently, Nasdaq and IntercontinentalExchange Group control the primary SIP feeds for stock data, which meant that when Nasdaq’s SIP feed went down, listed stocks couldn’t be traded on numerous other equities markets, either. SIFMA argues that more competition would help reduce single points of failure and encourage innovation in the space. “Ultimately, there should be multiple SIP providers for each tape, including providers beyond exchanges, with revenue based on number of subscribers,” Lazo wrote to White. “This would allow consumers to choose among providers, yet still promote competition to promote improved service.”

While SIFMA cites a number of reasons to change the market, including transparency, the association’s ultimate goal is to change a system built for second-by-second updates that’s still being used in a microsecond market.

“The fact that things have always been done a certain way doesn’t mean they have to be done that way forever,” Lazo told Bloomberg.

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