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TSE chief blames firms for tech woes Head cites equipment at member brokers
Staff and Reuters News Agency Saturday, March 11, 2000
Toronto Stock Exchange head Barbara Stymiest finally broke her silence yesterday on the growing controversy surrounding the TSE's trading shutdowns, citing outdated technology at member firms.
Ms. Stymiest, president and chief executive officer of the exchange, said that while the TSE has regularly updated its technology, some member firms have not.
"We have a very state-of-the-art engine running on state-of-the-art equipment and it's how the orders are getting in," Ms. Stymiest told reporters after a speech at a mining conference in Toronto. "Some members are using old technology."
On Tuesday, the TSE had one of its worst crashes ever, opening an hour late, and then going down for another 98 minutes in the afternoon.
The problems made Canada's biggest exchange the punch-line of various Bay Street jokes. And market players grumbled that the recent series of breakdowns make the exchange -- No. 14 in the world in terms of value traded -- unworthy of "world-class" status, despite the burgeoning trading volume that has flowed through its systems in the past few months.
Earlier this week, the TSE blamed a failed hardware component for the crash.
Yesterday, Ms. Stymiest said the problem had to do with the way that some brokerages register their trades.
"Some of our members are still using . . . the old fragile code that's existed for 20-odd years," which should change in September, Ms. Stymiest said.
That's when the exchange's CATS (computer-assisted trading system) processor will be removed and the exchange will begin channelling all trades through one gateway instead of three.
"We're in ongoing dialogue with all of our members on a regular basis with how their orders come into the exchange." These talks are "some of the very many steps that we're taking to ensure that we continue to raise the bar higher and have as high availability as possible," Ms. Stymiest said.
Last September, when Ms. Stymiest was named president of the TSE, she dismissed technology problems at the exchange as "an odd outage for a minute or two."
Since then, there have been at least four technology-related incidents, including troubles with calculating the value for some of its indexes, delays in confirming trades, and complete system crashes.
In a speech yesterday, Ms. Stymiest characterized the recent problems as "glitches."
"The fact is, our trading systems' reliability track record is good. In 1999, our trading systems were available 99.96 per cent of the time. And to date in 2000, our system trading availability has increased to 99.98 per cent -- a record most companies would be proud of."
"At the TSE, we don't think that's good enough," Ms. Stymiest said, according to speaking notes for a speech she gave at the Prospectors and Developers Association of Canada conference in Toronto.
Ms. Stymiest compared the TSE's recent woes to the low prices of mining stocks, sparking laughter from the 300-odd audience. "You are not the ones who feel underappreciated these days. It has been quite a week at TSE," she deadpanned.
Ms. Stymiest said that given the unprecedented volumes the TSE is processing, it is "unfortunate, but not surprising that there has been the occasional glitch."
Investor infatuation with penny stocks was cited as one reason for heavy volumes, which have soared in the past six months. In January, the number of transactions more than doubled to 2.83 million from 1.28 million in August, 1999.
"We've made huge investments in technology and if we hadn't we wouldn't be able to process the volumes that we are processing, 99.98 per cent of the time," Ms. Stymiest said.
Yesterday was the first time Ms. Stymiest spoke publicly about the power outages despite repeated requests for interviews.
Tuesday's woes were at least the third system problem to crop up this year.
-- Martin Thompson (email@example.com), March 14, 2000