20130824 – London
Nasdaq software glitch halts trading
A major fault with the software that publishes prices on the Nasdaq stock market caused an unprecedented halt to trading for three hours. The shutdown affected a large number of other exchanges that rely on Nasdaq’s pricing software, and caused chaos.
The Nasqaq software failure follows hot on the heels of a series of other failures in the technology which underpins the markets. In May 2012, stock exchanges failed to cope with the massive floatation of Facebook, leaving traders unsure if their orders had gone through. UBS claims it lost £240m in the debacle, illustrating the serious consequences of inadequate IT infrastructure supporting the exchanges.
The Securities and Exchange Commission has said it is monitoring the situation but industry experts have highlighted the need for greater regulation on the technology behind the major stock exchanges. The rules are currently not very strict, with exchanges able to voluntarily choose to have the SEC assess their back-up and redundancy plans; there is currently no rule requiring exchanges to go through this process.
