NYSE ARCA SUFFERS GLITCH
Only 53 of 1,230 securities closed through normal auction-driven method on Monday
NYSE Group sowed confusion among traders after a technical error hobbled one of its exchanges on Monday.
NYSE Arca, the largest United States listing venue for exchange-traded funds, shifted to backup methods for calculating the closing prices for most securities, according to a series of trader alerts.
However, it said yesterday all systems were now functioning normally.
While high-profile exchange malfunctions are becoming rarer in the US$27 trillion (RM119 trillion) US stock market, Monday’s fault highlights the importance of closing auctions, which have assumed a bigger role with the growth of passive investing.
Out of 1,230 Arca-listed securities, only 53 were closed through the normal auctiondriven method. Those that weren’t include the US$237 billion SPDR S&P 500 ETF and US$33 billion SPDR Gold Shares ETF, two of the largest exchangetraded funds in the world.
“One could argue the role of NYSE official closing prices is one of the most important in the market,” said Spencer Mindlin, an analyst at Aite Group LLC.
“Millions of portfolios and retirement accounts depend on the closing prices of NYSE-listed stocks and ETFs.”
Not knowing the closing price for a security can be a source of risk for traders, leaving fund managers unable to accurately tally the value of their holdings.
The error comes as NYSE still faces fallout from a separate technical error almost two years ago.
Parent Intercontinental Exchange Inc revealed last month that Securities and Exchange Commission investigators believed a 3 ½-hour New York Stock Exchange outage on July 8, 2015, violated the law. Bloomberg