Nasdaq, NYSE at odds on market outage cause as SEC seeks facts

“U.S. regulators have asked Nasdaq OMX Group and NYSE Euronext to come up with a timeline of Thursday’s three-hour trading disruption, but the rival exchange operators have been unable to agree on the details, according to several sources familiar with the situation on Monday,” John McCrank and Angela Moon report for Reuters.

“Five days after a glitch that paralyzed Nasdaq-listed stocks for three hours on all U.S. markets, Nasdaq and NYSE have a different understanding of what happened in the period preceding and during the blackout, with each side blaming the other for the outage, according to the sources,” McCrank and Moon report. “At the center of the disagreement is the role of Arca, NYSE’s fully electronic stock market. The blackout, which saw trading in about 3,200 Nasdaq-listed stocks such as Apple Inc… grind to a halt, was preceded by connectivity problems between Arca and the Nasdaq-operated Securities Information Processor (SIP). The SIP consolidates stock prices and distributes them to the market. What’s not clear is whether the problem at the SIP was caused by issues at Arca or technical flaws at the processor.”

McCrank and Moon report, “Nasdaq believes Arca’s connectivity problems ultimately led to a freeze in the SIP, prompting the exchange to shut down the connection just before the processor froze, they said. Because of Arca’s repeated attempts to connect to the SIP, the processor’s memory reached capacity, its servers were overwhelmed, and it was unable to revert to backup systems, they said. But people close to NYSE said while Arca had difficulties connecting to the SIP, such connection problems between exchanges are routine. So if the problem caused the SIP to shut down, it only exposed a flaw in Nasdaq’s systems, they said. NYSE believes that Arca’s connection was inadvertently shut down for 15 minutes by Nasdaq, and that it was back up and running for 45 minutes without a problem before Arca voluntarily shut it down at Nasdaq’s request, the sources said.”

Read more in the full article here.

MacDailyNews Take: Competent parties would have had their cover story all ready to go.

2 Comments

  1. No doubt country/organization X contacted the White House and said, Look what we can do.

    It’s a Brave New World. We’ll make it, but only because we’ll pull together when it really matters.

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