NASDAQ glitch shuts down 3 trading networks (new software)greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Nasdaq glitch shuts down 3 trading networks
Copyright ) 1999 Nando Media Copyright ) 1999 Associated Press
NEW YORK (October 7, 1999 8:05 a.m. EDT http://www.nandotimes.com) - Glitches in new software to run the Nasdaq Stock Market's stock quote display system during after-hours trading sessions forced the temporary shutdown of three electronic trading networks.
Instinet, Island and Brass Utility, known as Brut - three of the largest electronic communication networks, or ECNs - were all back online early Wednesday afternoon after blackouts ranging from 2 1/2 to 3 hours.
A Nasdaq spokesman said the software meltdown caused delays in transfers of information on Nasdaq's SelectNet system, which is an electronic network linking all Nasdaq market participants.
When brokers and Nasdaq market makers tried to complete trades on the three affected ECNs via SelectNet, the orders came through late and were, in many cases, canceled or otherwise disrupted.
The delays on SelectNet eventually forced the Nasdaq to remove stock price information related to the three ECNs from the Nasdaq's price quote display system, effectively shutting the ECNs down.
The blackouts began around 10 a.m. EDT. Island was back online at 12:37 p.m.; Instinet at 1 p.m., and Brut at 1:04 p.m., according to the Nasdaq.
"There was an issue today with the slowness of the SelectNet system. Thus, we reduced the volume of activity by removing several high traffic ECNs temporarily from the system, both voluntarily and at our request, to allow the rest of the market to operate normally," J. Patrick Campbell, the Nasdaq's chief operating officer, said in a statement.
The blackout didn't go over well with at least one of the ECNs.
Cameron Smith, Island's legal counsel, complained that Nasdaq withdrew Island's quotes from the Nasdaq's display system without Island's consent, causing Island to lose the 25 percent of its business that is channeled through Nasdaq's systems.
"It's troubling for us," Smith said. "Because of the delays, we were denied trades."
Brut president Brian Hyndman said his ECN risked losing credibility with its customers. But he was philosophical about the blackout. "We want Nasdaq to correct the problem so we can all move forward. It was really just a bump in the road," he said.
Instinet officials didn't immediately return calls seeking comment.
It's because of ECNs that offer extended hours trading sessions to their customers - including the three that were hit Wednesday - that the Nasdaq agreed to keep its quote display system open until 6:30 p.m., 75 minutes past the traditional 5:15 p.m. closing time.
Nasdaq officials said they expect to begin offering the extended quotes on Monday, pending approval from the Securities and Exchange Commission.
Nasdaq announced last month that its systems that track stock prices and trading volume will keep operating longer to help provide more information to investors who trade after hours through electronic networks.
The move is significant because price and volume information on after-hour trades on all ECNs will become available at one central source for the first time. Currently, after-hours investors only can see trades conducted on the networks they use, although the ECNs have discussed creating a central information system.
By DUNSTAN PRIAL
-- Homer Beanfang (Bats@inbellfry.Com), October 07, 1999
Don't worry Homer, looks like it's working fine now. The NASDAQ is headed down, as should be expected under our current economic conditions.
How do you get a name like Homer Beanfang amyway?
-- @ (@@@.@), October 07, 1999.