London Stock Exchange Dies On Critical Day

September 8th, 2008 · No Comments

The London Stock Exchange suffered its worst systems failure in eight years on Monday, forcing the world’s third largest share market to suspend trading for about seven hours and infuriating its users.

“This halt today clearly has once again damaged (the LSE’s) reputation as a leading exchange, especially on a day like today, highlighting that it may have been unable to handle the volumes this morning,” added another trader.

According to the LSE Live Announcement site, “connectivity problems” started to occur from 9.07am and continued through to 4pm and then onto the close. At various times during the day, connectivity was returned to users, but then pulled from them. Users were at various times of the day able to add to their order book but no execution of trades occurred to make it fair to all traders.

However according to the IT World in London:

The LSE said the system had been hit by a “connectivity issue” and insisted that the problem did not lie with its flagship TradElect trading platform.

The schedule of events suggested database problems (from my experience), not network problems. Network problems are usually described as access issues.

What is of interest is that this system is not based on highly-available systems such as Concurrent, IBM or Tandem but based on Microsoft Windows technology. To my knowledge this is the only mission critical trading system in the world that is based on low end technology.

Other speculation including Telegraph:

Traders said the exchange suffered an “overloading” caused partly because the FTSE 100 ended down sharply on Friday, so dealers who were betting on further falls in the index would have had to close their positions.

This may suggest there was problems on Friday. However it remains to be questioned, why there is no backup and redundant systems:

City veteran David Buik told AP: “For the life of me, I cannot understand why the LSE system is not run in duplicate. So much and so many clients rely on the LSE’s durability. They cannot afford to be let down.” He said European clients were furious at the lost day.

Continuing…..

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