Markets

London’s main stock indices hit by LSE software glitch

Outage affected securities listed on the FTSE 100 and FTSE 250

An employee stands near a logo at the London Stock Exchange Group Plc’s offices in London.

Fri Aug 16 2019 - 17:07

A software glitch on the London Stock Exchange caused a nearly two-hour delay to the start of trading on Friday, in the most serious malfunction for the LSE in eight years.

The outage affected securities listed on the FTSE 100 and 250, the two main UK stock indices, which track large and midsized companies worth about £2.3 trillion (€2.5 billion). Trading eventually began at 9.40am – on a normal day it would begin at 8am.

Although a “technical issue” caused a one-hour delay to the start of trading in June last year, this outage was the most serious since 2011, when the installation of a new trading system caused a number of problems including an hours-long period when trading was unavailable.

There was also a significant glitch in September 2008 in the midst of the financial crisis, which stopped investors from trading in the middle of the day.

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Second problem

After fixing the problems in 2011, the LSE had been widely considered one of the most reliable exchanges in Europe. But this second problem in two years raises questions about the group’s technology.

Throughout the morning on Friday, the LSE issued updates indicating its investigation was continuing, although it did not say what had caused the outage beyond that it was a software problem.

“London Stock Exchange experienced a technical software issue this morning that affected trading in certain securities,” the exchange said.

Friday’s trading problem comes at an uncomfortable moment for LSE chief executive David Schwimmer, who took over after leaving Goldman Sachs last year. Just weeks ago he sealed a deal to buy data provider Refinitiv with the aim of turning the LSE into a global markets and information powerhouse.

Trade in FTSE 100 stocks took place during the downtime on Friday morning on CBOE Europe, LSE’s main rival.

Lower volumes

Trading volumes on CBOE Europe in FTSE 100 stocks was about €660,000 during the LSE outage. Last month, the average daily trading in UK issues on the LSE was £4.4 billion .

Alasdair Haynes, chief executive of Aquis Exchange, a rival London trading venue, said there were lower volumes in comparison with normal.

“It’s very disappointing. It just goes to show that investors don’t trade unless the national exchange is open, even when there are alternative markets available.”

The FTSE 100 rose about 0.4 per cent after the delayed LSE open.

- Copyright The Financial Times Limited 2019

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