Goldman Sachs Limits Own Index Trading
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NEW YORK — Goldman, Sachs & Co. said Friday that it would limit a minor portion of its stock program trading business, reflecting the industry’s scramble to preempt government regulation of the practice and to regain customers scared away by the October crash.
Goldman said it no longer would conduct index arbitrage trades for its own account due to concerns that the practice worsened volatility in the stock market.
Goldman still will make such trades for its customer accounts, by far the bigger business for the firm, and said the change was “not significant.”
The announcement came a day after the New York Stock Exchange tightened restraints on index arbitrage and as the Senate Banking Committee wound up four days of hearings in Washington on the causes of the stock market crash and what should be done to prevent a recurrence.
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