As of this posting, the New York Stock Exchange (NYSE) has resumed trading in equities and my heart goes out to those working in operations and IT at affected firms. These Ops foot soldiers will have to reconcile, track, record and reconstruct transactions that were caught short by the three-and-a-half hour systems halt on Wednesday, July 8.
Yet there may be some upsides to savor from this embarrassing episode.
First, the much-criticized fragmentation of trading venues turned out to be a major positive as firms could shift to alternatives. NYSE itself noted that NYSE Arca was up and running and handling NYSE-listed equity transactions; NYSE Amex/Arca options was also open for business.
The promise of electronic, high-speeding routing of orders has lived up to expectations and many investors were able to shift without missing a beat. More importantly, a global panic was averted because one venue no longer has a stranglehold majority on the industry.
Another upside is that social media was able to spread lots of information far and wide about the developing situation. Even NYSE officials who fumbled at the start of the halt wisely used Twitter and then traditional media to get the word out. By the time Thomas Farley, NYSE president, was speaking to CNBC cameras the world had been informed of key details such as the acknowledgment that a systems glitch and not a cyber-attack was the root cause for the malfunction.
Yet another positive is that NYSE, which was acquired by Intercontinental Exchange Inc., (ICE), will likely undergo a serious inventory of the incumbent IT infrastructure, workflows, and disaster recovery strategies. There is also likely to be reviews of the IT and operations support staff to find out what went well and what areas need improvement. Since the ICE takeover, there have been layoffs, executive departures and selloffs of technology; it would be interesting to know if some key expertise was ushered out in an intemperate way.
Finally, it is a good thing that trading resumed for almost one hour at the end of the day because it’s likely to ease the mopping-up operation among participating firms and at the exchange.
Let’s hope the clean-up for all goes well.
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