A computer malfunction that knocked out trading at the New York Stock Exchange for more than three hours Wednesday probably stemmed from a software update that went awry, said two people briefed on a preliminary review.

The NYSE must now verify the cause and report its conclusions to the U.S. Securities and Exchange Commission, said the people who asked not to be named because the inquiry isn't public. The SEC will use those findings to investigate whether any rule violations occurred, the people said.

The breakdown is the most serious outage since the Nasdaq Stock Market halted trading in its shares in August 2013 due to a broken price feed. The latest failure renews pressure on the SEC to ensure electronic markets are reliable after numerous disruptions and the May 2010 flash crash eroded investor confidence.

"The agency will be interested in what the root cause is, whether it should have been anticipated, and how the issue is dealt with," said James Burns, a partner at law firm Willkie, Farr & Gallagher who previously was the SEC's deputy director of trading and markets.

'Closley Monitoring'

SEC Chairman Mary Jo White said the regulator was "closely monitoring" the situation and was in contact with NYSE officials, according to a statement.

Glitches noticed early in the day "likely" resulted from a software upgrade, NYSE President Tom Farley said in an interview with Bloomberg Television. Trading was then suspended, because "I didn't feel like we had the level of trust in our systems that is required," he said.

Technical breakdowns have become a fact of life in U.S. equity markets, where everything from the routing of orders to the matching of trades is done by computers. While Wednesday's outage stopped trading at the New York Stock Exchange, shares listed on that exchange continued to trade on other venues such as the Nasdaq Stock Market and Bats Global Markets Inc.

Trading resumed on the NYSE shortly after 3 p.m. and the market closed normally at 4 p.m.

The outage occurred four months before new SEC rules take effect that hold exchanges and some private trading venues accountable for technology disruptions. The rules, known as Regulation SCI, require exchanges to report on a quarterly basis any substantial computer-system changes.

Backup Systems

The regulation also requires exchanges to test that backup systems are robust enough to recover from natural disasters or computer malfunctions.

Regulators are likely to consider whether Wednesday's halt should prompt any changes to that rule, the people said.

White called Farley and Intercontinental Exchange Inc. Chief Executive Officer Jeff Sprecher Wednesday to discuss the outage, according to the people. At the time, exchange officials and regulators were focused on determining how to restore trading in time for the surge of orders that happens during the final minutes before markets close.