By John McCrank
NEW YORK, Sept 4 Nasdaq OMX Group said
the system at the center of the Nasdaq exchange's three-hour
trading halt on Aug. 22 had a six-minute outage on Wednesday for
a small number of stock symbols, but the issue had been resolved
and trading was not affected.
The Securities Information Processor (SIP), which receives
all traffic on quotes and orders for Nasdaq stocks, was down
between 11:35 a.m. and 11:41 a.m. Eastern time for symbols from
PC through SPZ, the exchange operator said in a note to traders.
While Nasdaq said trading was not affected, exchange
operator Direct Edge said it temporarily halted trading in
Nasdaq-listed securities ranging from PBCP through ZZZZ between
11:43 a.m. and 11:48 a.m.
The U.S. Securities and Exchange Commission said it was in
contact with Nasdaq and monitoring developments.
The issue was not related to the Aug. 22 Nasdaq outage, when
a software bug and other technology issues in the Nasdaq-run
system was triggered by connection problems with NYSE Euronext
Inc's Arca Exchange, a person familiar with the matter
In that instance, the SIP was unable to revert to a backup
system and trading was halted in all Nasdaq-listed securities,
including names like Apple Inc, Google Inc,
and Facebook, for three hours.
Nasdaq acknowledged on Thursday that it was ultimately
responsible for the trading halt.
The latest outage was due "to hardware memory failure in a
back-end server," but a backup system successfully kicked in and
the issue was resolved, Nasdaq said.
The exchange said last week it was in the process of
identifying potential design changes to make the SIP more
resilient "including architectural improvements, information
security, disaster recovery plans and capacity parameters."
Following a committee meeting on Wednesday, Nasdaq outlined
a number of proposals including that it would manually shut off
connections to other exchanges and market participants in the
case of unusually high traffic clogging the data feed and that
it recommended more frequent stress testing.
"Our objective is to learn from the events and work together
to identify appropriate solutions that improve the reliability,
governance and operations of the SIP," Nasdaq said.
Nasdaq plans to present its initial recommendations for
change to the SIP governing committee, made up of U.S. exchanges
and the Financial Industry Regulatory Authority, within the next
SEC Chair Mary Jo White has called a meeting with the heads
of exchanges on Sept. 12 to address the glitch. The meeting in
part will focus on ensuring SIP technology is robust enough.