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Nasdaq to investigate trading glitch, improve communications
August 29, 2013 / 3:57 PM / 4 years ago

Nasdaq to investigate trading glitch, improve communications

NEW YORK, Aug 29 (Reuters) - Nasdaq OMX Group said it will undertake a thorough forensic analysis in coming weeks of the massive trading outage that paralyzed the exchange for more than three hours last week, and pledged to better communicate with the industry in case of further disruptions.

Nasdaq, in a letter to clients, also said it was working to identify areas to enhance its systems. It said it will work with regulators, member firms and others on the forensic analysis.

“It is clear that these systems could be more robust in their support of markets given the complex ecosystem in which we operate today,” Nasdaq said in the letter sent Wednesday to companies that list their stock on its exchange.

The U.S. Securities and Exchange Commission has asked Nasdaq and rival NYSE Euronext to come up with a blow-by-blow account of the trading halt that occurred on Aug. 22, which happened after a Nasdaq-run data processor failed. The SEC has called a meeting with the exchanges for Sept. 12 to discuss the data systems, as well as other critical market systems and infrastructure issues.

One of the top complaints on Wall Street after trading in Nasdaq-listed stocks resumed on Aug. 22, was that Nasdaq did not communicate enough with its member firms or the general public during the outage. The same concerns were voiced in May 2012, when a software glitch impacted Facebook Inc’s highly anticipated market debut on Nasdaq.

“One of the lessons we learned is that we need to communicate better,” Nasdaq said in the letter. “One of our first actions was to develop a more comprehensive plan and set of principles for how we intend to communicate with you going forward.”

The New York-based exchange operator said it would provide timely updates using multiple sources of communications, including an open conference line directly to Nasdaq for listed company executives during market related events.

It also said it would update its websites regularly and use Twitter and other social networking channels, as appropriate, to distribute critical information, and that emails would be sent to all affected parties during and after any major event.

Nasdaq issuers will also be contacted via telephone and/or email if there is an exchange event that impacts them, the exchange said. (Reporting by John McCrank; Editing by Leslie Adler)

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