CHICAGO Jan 14 CBOE Holdings Inc is
examining hardware and software systems as it tries to prevent
any repeat of the shutdowns and glitches that plagued U.S.
financial exchanges last year, executives said on Tuesday.
CBOE, owner of the Chicago Board Options Exchange, released
details on its efforts after saying in November that it would
take unspecified steps to "harden" its trading technology.
"There is an allocated budget to do additional things which
we hadn't done last year, and we will stop at nothing to get
things exactly the way that we want them, which is 100 percent
up time or as close to that as possible," President Ed Provost
told reporters at a media gathering.
CBOE had to shut down for a half day on April 25 because of
a problem connected to expanding its trading hours. Technology
failures forced shutdowns at other U.S. exchanges last year as
well, disrupting trading and undermining confidence in the
stability of the technological infrastructure for U.S. equities
In September, CBOE participated in a meeting at which
Securities and Exchange Commission Chair Mary Jo White asked
exchange heads to develop a plan to address technical problems
in the wake of a three-hour trading outage in Nasdaq-listed
To reduce the impact of potential problems with computer
hardware, CBOE will move away from using hardware that supports
more than one function, Provost said.
"We're going to separate those functions, buy two pieces of
hardware and reduce the likelihood that something like that
--like a hardware failure -- would go out," he said.
CBOE also has implemented new methodologies of "rigorous
software testing to ensure there are no software bugs" that
would cause a trading outage, Provost said.
"A year from now we can look back hopefully and say, 'Boy we
had that one small outage but that was it,'" he added.
Chief Executive Ed Tilly declined to say how much money CBOE
was spending on the efforts. If CBOE suffers an outage, the
turnaround time to reopen markets will be faster than it was in
April, he said.
"We're talking now minutes instead of hours, which was the
norm last year," Tilly said at the media gathering. "That is no
longer the norm from CBOE's perspective. It's unacceptable."