The London Stock Exchange suffered its worst systems glitch in eight years today, forcing the world's third largest share market to suspend trading for most of the day and infuriating its users.
The problem occurred as markets rebounded worldwide following the US government's decision to bail out mortgage companies Fannie Mae and Freddie Mac.
"It's awful. On a day when the eyes of the world are watching all the financial markets, for us not able to trade it's appalling," one trader said.
"We have the biggest takeover in the history of the known world in the Freddie Mac stuff and then we can't trade. It's terrible."
The Johannesburg Stock Exchange, which uses the LSE's trading platform TradElect, also suspended trading. TradElect was introduced by the LSE in June 2007. A previous systems outage occurred in November that year, but lasted less than one hour.
"This halt today clearly has once again damaged (LSE's) reputation as a leading exchange especially on a day like today, highlighting that it may have been unable to handle the volumes this morning," another trader said.
The exchange would not say whether volume was the issue, and would not give details on what had caused the problem.
The LSE, the world number-three exchange by traded volume in the first half of this year, opened for trading as usual at 8am, but connectivity problems left some brokers unable to trade, so it was forced to suspend trading to ensure market players were not disadvantaged.
In an afternoon update on the situation it said that reconnecting customers was "taking longer than expected", and it later abandoned moves to reconnect.
The UK Financial Services Authority, in its Financial Risk Outlook 2008 report, says the risk of such infrastructure failures is growing with the rise of electronic trading and straight-through processing.
The LSE plans a series of system upgrades and is migrating Italian equities to its trading platform TradElect this month.
On June 17th, the Milan Stock Exchange, which the LSE acquired in October 2007, suspended trading due to technical difficulties.
The trading failure comes as the LSE faces increasing competition threat from rivals and new entrants.
Nasdaq OMX Europe announced it has been granted approval by UK's Financial Services Authority to operate as a Multilateral Trading Facility (MTF).
Reuters