The New York Stock Exchange determines the reason for the failure on Tuesday… and cancels more than 4,000 deals! Powered by Investing.com

The New York Stock Exchange determines the reason for the failure on Tuesday… and cancels more than 4,000 deals! Powered by Investing.com
The New York Stock Exchange determines the reason for the failure on Tuesday… and cancels more than 4,000 deals! Powered by Investing.com
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© Reuters.

Investing.com – The New York Stock Exchange, operated by Intercontinental Exchange Inc. (NYSE: NYSE), cited wild volatility in dozens of stocks that halted trading at the open on Tuesday. It said the root cause of the problem was a “manual error” related to the exchange’s disaster recovery settings.

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Specific price ranges

The exchange said that on January 24, 2023, at approximately 9:30 a.m., the NYSE began trading in 2,824 of the 3,421 NYSE-listed securities without attempting an opening auction due to a technical issue, after which approximately 84 of those affected tokens stopped. .

The New York Stock Exchange stated that:

“Because the exchange, for the affected stock tokens, entered into continuous trading in the absence of opening auctions, LULD ranges for such tokens were assigned based on the first qualifying trade of the day, not the auction price. By design, these first trades were not yet constrained by ranges LULD.”

The upper limit lower limit (LULD) mechanism aims to prevent trades in National Market System (NMS) securities outside specified price bands.

“Furthermore, because the information on LULDs needs to be sent to the Securities Information Processor (SIP), which then posts it back to the participating exchanges, a number of trades occurred after 9:30 in the morning,” the NYSE added in its statement. The exchange prior to receiving the LULDs from the SIP resulting from the first trades in the affected tokens (and thus, prior to any restriction of the trades by the LULD parameters being set)”.

manual error

The root cause was determined to be a manual error involving the exchange’s disaster recovery settings when the system was started on the first day.

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As a result, the NYSE declared that any trades made on NYSE-listed tokens that did not conduct an open auction are null and void, And that includes deals that:

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(1) Occurred after 9:30:00 but before the LULDs were received

(ii) Executed at a price further than the reference price, which is specified in Section 7.10(d) of the New York Stock Exchange Regulations, and higher than the percentage price, which is specified in Appendix A to the LULD Plan.

Accordingly, the exchange subsequently determined that approximately 4,341 trades in 251 tokens should be cancelled.

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