An exchange outage occurs when trading platforms or exchange system malfunction or are disabled. Sometimes exchange outages stem from an excessive overflow of market participants.
This can occur as a result of software updates, technical issues, glitches, or even minor disturbances in a platform’s functionality.
With nearly every exchange outage comes an increased demand in not only knowing what caused the outage but also for investors and businesses to question that exchanges infrastructure in use.
Neither the U.S. Securities and Exchange Commission, New York Stock Exchange, nor the National Association of Securities Dealers (NASD) requires broker-dealers to maintain a record on system delays and outages or their related causes.
Notable Examples of Exchange Outages
On September 8, 2008, the London Stock Exchange had to prohibit trading for over 7 hours due to a technical issue with a newly developed trading platform that was co-developed with Microsoft.
During June 3, 2008, both the OMX Nordic Exchange and the Oslo Stock Exchange opened more than five hours later due to a complication stemming from their trading system/
Stock exchanges nested in Stockholm, Helsinki, and Copenhagen were also affected as a result of using the same backend technical system.
The Tokyo Stock Exchange experienced an outage in 2005 when a software bug was the root of a crash with not only the main system of the exchange but also the backup systems.
This led to the suspension of trading for more than four hours.
Market participants have strong demands and expectations for exchanges to seamlessly operate around-the-clock.
Given the inability to calculate the seemingly endless sum of variables that may cause outages, both exchanges and traders are stuck with having to see outages through.