Technical problems with the London Stock Exchange's Infolect data delivery system interrupted trading yesterday for 40 minutes, just before the market closed. The timing was highly unfortunate, as it coincided with US stock markets having one of their worst days of the year.
From the Times Online:
Furious traders were left twiddling their thumbs for the last 40 minutes of trading yesterday after the London Stock Exchange’s IT system collapsed.
The LSE emphasized that the trading system itself was not down but only the Infolect system that disseminates data to the market. However, the effect was that traders would have to wait until this morning to ask clients whether they want to settle trades, since stock prices were uncertain.
And from another Times Online article:
The LSE promised to recalculate the FTSE indices once the closing auction ended but last night it was unclear whether this had been done. Traders were forced to wait until this morning to settle their trades because the prices transmitted by the LSE were unreliable. The closing auction usually takes ten minutes after the 4.30pm market close but yesterday it was extended to 6pm.
In an attempt to learn specifics, I spoke with Catherine Mattison, spokesperson for the London Stock Exchange. She was tight-lipped about the whole incident, absolutely unwilling to divulge details:
We can't go into much detail, I'm afraid. There was a connectivity issue with Infolect, but it was fixed during the night and everything is working fine this morning.
Infolect is the LSE's data delivery system, governing the distribution and format of trading data. For more detailed technical information about Infolect, see this collection of documentation. An interesting technical note, describing Infolect data stream guidelines, can be found here.
This incident reminds me of a similar situation at Los Angeles airport (LAX), where basic networking problems stranded 20,000 passengers for hours. The LAX incident was handled with a much higher degree of transparency.
One wonders how a data transmission interruption could occur, since basic contingency planning includes connectivity scenarios. This failure must have involved both primary and backup systems, meaning the problem was not as straightforward as the LSE would have us believe.
The LSE's refusal to provide specifics begs the question whether the meltdown resulted from unavoidable technical issues, or whether poor management was actually to blame.