© Reuters. Signage is seen at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., November 11, 2022. REUTERS/Andrew Kelly
By John McCrank and Medha Singh
(Reuters) – A technical problem with the opening auction of the New York Stock Exchange on Tuesday led to more than 80 stocks being briefly stopped at the start of trading, sowing confusion among traders about which orders were filled. and if they were at the right prices.
The New York Stock Exchange, owned by Intercontinental Exchange (NYSE:) Inc, said it is still investigating the issue and traders may want to consider filing erroneous trading claims.
“What appears to have happened is a technical glitch where all my open orders on the New York Stock Exchange were automatically cancelled, even though some of them should have been filled,” said Dennis Dick, a trader at Triple D Trading.
“They’ve fixed it now, but this is going to be a big mess to clean up.”
The exact cost of the fallout from the failure is unclear, but the cost to brokers and retail traders is likely to be in the eight-figure range, according to a person from a major brokerage who spoke on condition of anonymity because the matter is delicate. .
The US Securities and Exchange Commission said it is reviewing the matter.
The NYSE opening auction blunder comes as the SEC is considering routing most retail stock orders through auctions with the goal of getting better prices for individual investors.
“The SEC’s plan to make us all cool with consumer auctions leaves a lot to be desired,” said James Angel, a finance professor at Georgetown University.
“Auctions are much more complicated than it seems. A lot of things can go wrong,” said Angel, who helped work on the auction process for Nasdaq Inc.
Stocks listed on the NYSE are listed on all 16 US stock exchanges, which use NYSE prices.
The NYSE is the only major US stock exchange that still uses a trading floor, along with electronic trading, a hybrid model that the exchange says makes it easier to discover prices during market open and close and during periods of imbalance or trade instability.
Technical errors on exchanges can erode market confidence. To hold exchanges accountable for such failures, the SEC adopted a broad set of business continuity and disaster recovery rules called Regulatory System Integrity and Compliance (Reg SCI) in 2014.
In March 2018, NYSE was the first exchange to be fined under Reg SCI. The $14 million fine was related in part to a nearly four-hour suspension of operations in July 2015 that resulted from a faulty software implementation.
