As the markets open for trading today, the specter of the near-meltdown late on Thursday is still with us. For the moment, regulators are discounting the theory that a fat-finger error transformed a million dollar order into a billion-dollar order and wreaked havoc. Citigroup (NYSE: C) was certainly quick to deny it was the culprit. And the explanation was starting to seem a bit far-fetched.

Regulators are now looking into the many linkages among exchanges and other execution venues, an issue we discuss often at FierceFinanceIT. Over the years, these technology greased linkages have fragmented the market to a degree that has made some uncomfortable in an era of high-frequency (high-frequency trading news), algorithmically driven trading. In hindsight, the meltdown on Thursday was inevitable. We're lucky that the damage was contained. It could've been a lot worse.

One area of concern: So-called liquidity replenishment points, LRPs. Bloomberg notes, "Rapid-fire orders trigger what the NYSE calls liquidity replenishment points, or LRPs, shifting trading into auctions overseen by market makers." The system is designed to restore efficient trading on the Big Board, but it may be that the selling volume gets so heavy that as it spills to other venues, it merely spreads the havoc.

One regulator told the New York Times it appeared that as stock trading was slowed on the NYSE when big price moves started, these apparently orders moved automatically to other, electronic exchanges. These venues did not have pricing restrictions, and you ended up with a free fall in some stocks. All aided by computer-driven trading. Consider that Accenture and Philip Morris were among the stock that plunged more than 90 percent. At one point, Accenture was trading at a penny. Many of these trades will likely be canceled.

About 29.5 billion shares were traded on Thursday, the most since October 2008. And the volume breakdown is telling. About 2.6 billion shares were traded on the NYSE, the lowest level relative to overall volume in three years, according to Bloomberg. So the main action may well have been at other execution venues where perhaps pricing restrictions and the like are less developed.

Not that the system worked without controversy at the main exchanges. The NASDAQ criticized the Big Board for halting trading in some stocks for 90 seconds, even though official market-wide circuit breakers were not triggered. The NYSE turned around and hit back at the NASDAQ for not halting trading in some stocks. Some have noted the lack of a market-wide circuit breaker that might have proven useful.

But we need a more thorough review. And it's a good sign that the exchanges have decided to stop bickering. It's also a good sign the SEC has summoned the exchange chiefs to Washington to start talking about all this. This much is clear: The incident strengthens those who have raised concerns about the market structure that has evolved over the past few years. Dark pools, fragmentation, naked access, Reg NMS-these are all issues that are being reviewed, and anyone making a case for regulatory change will have something concrete to point to. - Jim