Australian exchange freezes for three hours

Trading in Australia came to a standstill Thursday when all markets on the exchange’s ultra-low latency trading platform – ASX Trade – were suspended for more than three hours.
By None

Trading in Australia came to a standstill Thursday when all markets on the exchange’s ultra-low latency trading platform – ASX Trade – were suspended for more than three hours.

The markets were placed into the ‘enquire’ session state – effectively bringing a halt to trading – at 10.05 due to what the Australian Securities Exchange (ASX) called a “connectivity issue”.

The glitch resulted in equity markets freezing for more than three-and-a-half hours, pre-opening again for auction at 13.40 and resuming normal trading at 14.10.

“Problems arose after their rolling auction started this morning,” said Bryce Kelly, head of product strategy in Asia for agency broker Instinet. “We were still able to do a fair amount of volume but the blackout did affect firms street-wide.”

The overnight announcement of a deal to resolve the euro-zone debt crisis resulted in high volumes during the Asian trading day. Turnover on the Hong Kong Stock Exchange spiked to HK$93 billion, up from Wednesday’s HK$63 billion and Tuesday’s HK$59 billion.

The ASX insisted all trades executed before 10.05 were valid and would stand, and all markets closed at the end of the day as normal.

“When there are more venues in Australia, investors will be able to continue trading in exchange blackouts like this,” said Nick McDonald, head of Asian cash equities at Louis Capital Markets. “The issue then becomes one of data and whether or not you want to trade when the exchange is down and it is essentially not ‘live’.”

Monday marks the launch of Chi-X Australia, analternative venue which will compete with the ASX.

The exchange said it had subsequently worked with its vendor to resolve the issue but has not yet divulged the particular cause of the problem. It said ASX Trade will open as normal at 10.00 on Friday 28 October 2011.

ASX Trade is the Australian exchange’s ultra-low latency trading platform based on NASDAQ OMX’s Genium INET system.

Key products listed on ASX Trade include listed equities, exchange traded options, warrants, exchange traded funds, index options and interest rate securities.

ASX Trade takes ASX’s latency down to 300 microseconds and supports a multi-functional, multi-asset class trade facility called TradeMatch, launched in November 2010, and a parallel trade facility, PureMatch, aimed at high frequency trading.

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