Despite the ever increasing investment in infrastructure which ensures not only low latency but also constant availability of international executing venues, often connected via a single connection, and in some cases,microwave technology requiring no cabling or additional infrastructure. The announcement of the outage yesterday at the Frankfurt-based derivatives exchange Eurex, demonstrates that all is not infallible.
Whilst the advances in infrastructure have been tremendous recently, with many large scale developments having taken place this year alone, disruptions leading to the suspension of trading and potential losses can still occur, this further highlighted by last week’s trading system glitches at Goldman Sachs and NASDAQ OMX venue, the latter of which resulted in $5.65 trillion of securities being halted for three hours due to the failure of the Securities Industry Processor.
Eurex is the most recent to announce that it suffered a similar outage, yesterday having posted on its website that the venue was investigating technical issues. This appeared on the Eurex website at 8.30am yesterday morning (Central European Time). In a separate statement, Frankfurt-based Eurex confirmed that trading had resumed at 9.20am, signaling a 50 minute suspension in activity.
Confidence in a trading environment and its reliability is paramount to its credibility, however, this succession of glitches could instill fears regarding the ability of the market infrastructure’s capability of keeping pace with the demands for high-performance electronic dealing.
At Eurex, the fault occurred on a new trading architecture that the exchange introduced only in December, billing it as “the world’s most advanced trading system”. The Eurex derivatives trading market was halted at 0620 GMT, 20 minutes after trading started, “in order to protect the integrity of the market,” Deutsche Boerse said.
“An incorrect time synchronization within the system” triggered the market halt. The problem was solved, pre-trading started at 0720 GMT and, as of 0730 GMT all products were once again tradeable, the exchange told the Wall Street Journal yesterday.
In the case of the trading suspension at Eurex, fortunately, this occurred on a day which was a national holiday for banks across most of Europe, therefore, limiting the detrimental effects. However, undoubtedly, a watchful eye will be kept on this by major infrastructure providers to prevent nervousness among market participants.