A technological error at a market data hub operated by Nasdaq OMX led to stale data that left traders unable to determine US stock prices for a short period yesterday.
The glitch occurred at the UTP SIP system that governs the collection, processing and distribution of market data for Nasdaq-listed stocks - one of three exchange-operated systems that supplies market data to the US consolidated tape.
As a result of the error, market data for many Nasdaq-listed stocks did not refresh for around 15 minutes, rendering some consolidated tape data unreliable. The issue was resolved at around 13.53 EST, according to a Nasdaq OMX statement.
While the root cause of the problem is still unclear, according to a Nasdaq OMX spokesperson, the incident will raise further questions over the stability of US market infrastructure after a spate of incidents plagued US exchanges and brokers last year.
Nasdaq OMX was forced to offer compensation to members affected by its handling of the Facebook IPO after the exchange's systems struggled to determine an opening price for the stock, while its main rival NYSE Euronext was forced to halt trading in over 200 stocks on 12 November after a server error.
Another US bourse, BATS Exchange, had to cancel the IPO of its parent company BATS Global Markets - the first on its new listing services - after a software error.
Knight Capital, a US broker dealer, came close to extinction after suffering a US$440 million loss stemming from a problem with its market making system in August. Knight has since accepted a takeover offer from electronic market making firm GETCO.