Nasdaq blames software bug for its three-hour trading shutdown

 
Tim Wallace
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NASDAQ OMX Group’s massive trading halt last week was due to a software bug and other internal technology issues triggered by problems at NYSE Euronext’s Arca exchange that led a key backup system to fail, the exchange operator said yesterday.

Nasdaq said it was “deeply disappointed” by the three-hour outage on 22 August and while it pointed to connection problems between rival NYSE’s electronic exchange Arca and the Nasdaq-run system that receives all traffic on quotes and orders for Nasdaq stocks, it took ultimate responsibility for the glitch.

“Our backup system did not work,” Bob Greifeld, Nasdaq’s chief executive, said. “There was a bug in the system, it didn’t fail over properly, and we need to work hard to make sure it doesn’t happen again,” he said, referring to the inability of the system to fully revert to backup mode.

New York Stock Exchange parent NYSE declined to comment.

Nasdaq said it was in the process of identifying potential design changes to make the Securities Information Processor, or SIP, more resilient, “including architectural improvements, information security, disaster recovery plans and capacity parameters.”