The four-hour outage at the London Stock Exchange (LSE) on Friday resulted in a 28.6% drop in FTSE 100 turnover, but did not cause any significant drop in the bourse's market share of UK blue-chips.
While brokers adjusted their routing capabilities following the outage, buy-side traders were reluctant to shift trading across to alternative venues.
On Friday 25 February, the total value of FTSE 100 stocks traded was €6.39 billion according to data vendor Thomson Reuters, €2.56 billion lower than the €8.95 billion recorded on 24 February. The LSE's share of FTSE 100 stocks was 47.8%, compared to 47.9% the previous day.
Chi-X Europe, the largest multilateral trading facility (MTF), maintained a 26% share of FTSE 100 stocks on both Thursday 24 February and Friday 25 February, while BATS Europe saw a slight increase from 9.1% on 24 February, to 9.3% on 25 February. Turquoise, the LSE-owned MTF decreased from 6.6% to 6.4% share of FTSE 100 trading. Total turnover for the three MTFs combined was €2.66 billion on 25 February, 29.3% lower than the €3.76 billion recorded on the previous day.
On Friday, a market data dissemination issue meant that LSE members were unable to start continuous trading until 12.15. Problems were first discovered during the opening auction, where some trades were investigated for potential cancellation, but later allowed to stand.
This also meant all MTF dark pools that use the domestic markets as a reference point for their prices – such as BATS Europe's dark pool, Turquoise's mid-point book and Chi-X Europe's Chi-Delta – were unable to operate. According to the Thomson Reuters data, €299.5 million was traded in MTF-operated dark pools on Friday, 24.5%% lower than Thursday's total of €397.18 million.
According to one broker, spreads for FTSE 100 stocks, which normally average around seven basis points, were 63 bps wide at 08.30 on 25 February, 38 bps wide by 09.00 and 22 bps wide by 10.00.
Friday's outage was the third technology incident to hit the LSE Group in under two weeks, and the second since the exchange moved UK cash trading to its new Millennium Exchange technology on 14 February.
Following the migration, traders that use the data terminals supplied by Thomson Reuters, SIX Telekurs and Interactive Data found some bid and ask data for UK stocks appearing as zeros. The data vendors have now developed a work-around solution to the problem.
Borsa Italiana, the domestic Italian stock exchange owned by the LSE Group, also suffered a six-hour outage following a technical issue that impacted its DDMPlus data dissemination service.