A move by the Securities & Exchange Commission to speed up transactions and harness trading technologies on Wall Street is raising questions about how well-equipped the markets are to handle big volume.

While the SEC geared up its Reg NMS trading regulations smack in the middle of a stock market correction churning with record volume, the overwhelmed NYSE asked the agency to delay implementing at least some of the new rules designed to give investors the best price available.

The NYSE, which admitted its trading glitch cost the Dow Jones Industrial Average a loss of 1.4 percent in just one minute, cited electronic platform linking issues in asking the SEC for the delay.

But it remains unclear whether the agency would grant the NYSE an extension on implementing some regulations. An SEC spokesman told Reuters March 6 he was unaware of NYSE's request having been approved.

The NASDAQ had its problems with Reg NMS as well. The exchange said March 5 that a “small subset” of investors were unable to confirm some trades because of the new rules, according to Bloomberg. The AMEX had no such performance problems.

The unlikely timing of the SEC announcement of the new rule with the electronic trading debacle at the NYSE during the worst of the market meltdown was strange enough. But listening to NYSE Chief John Thain’s wordsmithing March 2, denying that the SEC was investigating his exchange brought me eerily back to my days as an investigative business reporter.

The words “investigation,” “probe” and “looking at” might seem synonymous to most civilians. But the effective dissemination of this often accusatory and potentially libelous phraseology is a PR pro’s most effective arsenal against nosy reporters and ambitious editors.

Thain denied any investigation by the SEC was underway of its electronic trading system, which basically failed miserably during one of the worst selloffs in years . Technically, Thain is correct. There is no “official” investigation. But there is a probe, or questions, if you will, that the SEC began asking almost immediately.

So why all the semantics? Why not just level with the investing public that the Big Board wasn’t quite ready to handle a 45 percent jump in average daily trading volume as 2.2 billion shares changed hands?

That doesn’t exactly inspire investor confidence--something everyone needs right now.

To give this some perspective, July 2002 was the last time the markets handled more than 2 billion shares on three consecutive days.

NYSE Group has responded to the problems by doubling its capacity to process electronic trading messages between brokerages, Thain told CNBC Feb. 28.

Reuters reported a Wall Street Journal story March 1 that the SEC was probing NYSE trading overload. In particular, the regulators are looking into whether the NYSE’s shift to electronic trading hamstrung its ability to handle the surge in volume, according to the news reports

More concerning is history repeating itself. This isn’t the first time that the NYSE has asked the SEC to postpone implementing Reg NMS. (It did so in February, asking the SEC for a 30 day extension to conincide with the roll-out of its trading system upgrades, which was granted.) Nor is it the first time the NYSE halted trading in a turbulent market.

The NYSE imposed trading curbs during the Black Monday stock market crash nearly twenty years ago, which many people blamed on program trading.

The trading phase of Regulation NMS has gone live, despite the wild mood swings in the stock market.

Erik Sirri, director of the SEC's division of market regulation said in a statement that he acknowledges the rollout of new trading systems "inevitably presents challenges for the market and its participants."

Sirri further stated,"exceptional trading volume and price volatility of the equity markets over the last few days raise the potential of even greater challenges.”