TMX exchanges operating normally Friday after glitch forced halt a day earlier

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TORONTO — TMX Group says trading activity is operating normally on its exchanges after a malfunction Thursday forced it to close trading early amid a major market selloff.

With trading resumed Friday, the Toronto Stock Exchange was trading down about 3.7 per cent in mid-afternoon trading amid concerns about the coronavirus, worse than U.S. markets which had a steep late-day selloff a day earlier.

The outage on the TSX, TSX Venture, Alpha and derivatives-focused Montreal Exchange came after a spike in market activity, said TMX Group interim CEO John McKenzie Friday.

“The suspect is the extraordinary volumes that we saw yesterday in the marketplace.”

The spike was especially pronounced in the messaging side of the system that relays the buy, sell, and cancel orders. Message volume had hit a one-day record of about 190 million messages by the time the system started failing at around 1:30 p.m.

“That level of volume, or it could be the mix of the volume, in terms of how it came in, caused a failure in the messaging appliance that we were working with,” said McKenzie.

He said capacity shouldn’t have been an issue, since they stress test the system up to closer to 300 million messages a day, and are still working to identify more specifically what went wrong.

In the meantime, the company had added extra capacity and McKenzie said the system was handling elevated volumes well on Friday.

The glitch Thursday had meant clients were unable to enter, modify or cancel open orders on its exchanges, leading TMX to halt trading a little before 2 p.m. and later clarifying it would remain closed for the day.

The last time TMX closed the TSX early was on April 27, 2018, due to internal technical issues, and the market was reopened the next trading day.

The 2018 incident was caused by a hardware failure in a central storage appliance of the trading system, the company said.

TMX’s CEO at the time Lou Eccleston said the company was committed to applying the lessons learned from this incident to help it prevent such issues from recurring in the future.

McKenzie, who stepped into the role after Eccleston stepped down suddenly in January, said TMX would work to regain trust.

“We start first thing today, and everyday forward to make sure we rebuild and regain that trust of the client base.”

TMX is not the only exchange to be hit by outages.

The London Stock Exchange had technical software issue last August that delayed its opening by close to two hours and also had a delayed opening in June 2018, and before that during a session in 2011.

The New York Stock Exchange saw a four-hour outage during trading in 2015, though it returned to service shortly before closing.

The Nasdaq, meanwhile has been thwarted by rodents on at least two occasions. Both in 1987 and in 1994 trading on the exchange was knocked out after squirrels disrupted power supplies to exchange computers.

Companies in this story: (TSX:X)

Ian Bickis, The Canadian Press