Tags: nasdaq | shutdown | technical | glitch

CNBC: Nasdaq CEO Greifeld Vows Exchange 'Will Get Better' at Handling Problems

Friday, 23 Aug 2013 08:03 AM

Nasdaq OMX Group has resolved the technical issues that led to Thursday's trading halt, but cannot guarantee there would be no future problems, Chief Executive Officer Robert Greifeld said on CNBC television on Friday.

He defended how the exchange handled the three-hour outage, claiming unspecified outside issues were the real cause.

Greifeld acknowledged the Nasdaq needs to get better at "defensive driving," but he said the exchange followed all the proper procedures once a problem was discovered.

"We all have to be aware of the other person not acting always in the proper way, and you have to have your system be able to handle defensive driving," Greifeld said.

"We're deeply disappointed with what happened yesterday. We aspire to perfection. We want to get to 100 percent up time."

While the worst case scenarios may have been averted, the outage still stands as among the most serious in a series of recent technological failures to hit the U.S. securities business, including a software issue at the Chicago Board Options Exchange this spring that delayed the start of trading there for half a day.

It was also the latest black eye for Nasdaq, which in May agreed to pay $10 million, the largest penalty ever against a stock exchange, to settle SEC civil charges over its mishandling of Facebook's initial public offering in 2012.

Late Thursday Nasdaq identified the problem as a "connectivity issue between an exchange participant and the SIP," or Securities Information Processor — essentially the system that receives all traffic on quotes and orders for stocks on the exchange.

This problem "led to degradation in the ability of the SIP to disseminate consolidated quotes and trades," Nasdaq said in a statement. "The cause of the issue has been identified and addressed."

Whether it has been addressed to the satisfaction of regulators is another question. U.S. Securities and Exchange Commission Chair Mary Jo White called for a meeting of Wall Street leaders to help insure the "continuous and orderly" functioning of securities markets.

The incident "should reinforce our collective commitment to addressing technological vulnerabilities of exchanges and other market participants," she said.

Thursday's outage could well give White fodder to press ahead with new rules, proposed in March, that would hold exchanges, clearing agencies and certain "dark pool" trading venues more accountable for taking steps to prevent potential systems disruptions.

© 2017 Thomson/Reuters. All rights reserved.

 
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Nasdaq OMX Group has resolved the technical issues that led to Thursday's trading halt, but cannot guarantee there would be no future problems, Chief Executive Officer Robert Greifeld said on CNBC television on Friday.
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2013-03-23
Friday, 23 Aug 2013 08:03 AM
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