The U.S. securities regulator is focusing its investigation into the Nasdaq outage on why a system for distributing stock prices and quotes was not robust enough, and believes a spat between exchanges is a distraction, a source familiar with the matter said on Tuesday.
Nasdaq, a unit of Nasdaq OMX Group Inc (NDAQ.O), halted trading in the thousands of shares listed on its platforms on Thursday, after finding that a system that consolidates stock prices – the Securities Information Processor, or SIP – wasn’t working properly.
The blackout was preceded by connectivity issues between the SIP and Arca, the electronic platform of NYSE Euronext (NYX.N). Reuters reported on Monday the two rivals are now blaming each other for the debacle.
“There’s a lot of finger pointing as to what caused the SIP to go down, but bottom line, the SIP really shouldn’t be going down,” said the source, who requested to speak anonymously in order to speak more freely.
The U.S. Securities and Exchange Commission expects to get to the bottom of the matter in the coming days, the source also said.
The SEC has asked Nasdaq and NYSE Euronext to come up with a minute-by-minute timeline of what went wrong, and Chair Mary Jo White has summoned the heads of exchanges to a September 12 meeting.
The meeting will focus on ensuring SIP technology is robust, as the August 22 event has made clear how crucial they are for the market, the source said.
(Reporting by Douwe Miedema; Editing by Karey Van Hall and Phil Berlowitz)
Courtesy of Reuters