London Stock Exchange hit by hour-long outage

Glitch at opening auction – the worst in seven years – so far unexplained

The London Stock Exchange suffered its worst outage in seven years on Thursday morning after a technical issue delayed the start of trading for an hour.

The glitch affected the opening auction, a key mechanism for the start of trade on the LSE as it establishes the opening prices for stocks. It is used as a reference price for deals that have been negotiated privately, and is still heavily relied upon by brokers. Many were reluctant to use other platforms without it.

Some trading in UK-listed companies did take place via Cboe Global Markets Europe, the LSE’s main rival. After the delay, trading began at 9am.

The LSE did not provide any additional information on what had caused the failure, but said it was investigating what had happened.

Outages on exchanges around the world are not uncommon. Deutsche Börse, the German exchanges operator, faced “serious issues” in March that caused a delay in the opening of equities and futures trading. Last month, Euronext had problems publishing major indices, including the French Cac 40.

However, blackouts of this kind had become rare at the LSE. Xavier Rolet, its previous chief executive, made improvements to its reliability his first priority when he took office in 2009 after IT problems caused the exchange to close for eight hours on one day during the peak of the financial crisis.

The LSE’s last significant outage took place in 2011, when it had a series of problems introducing its new system.

Orderly dissemination

Thursday’s problem prevented the orderly dissemination of prices but traders were calm. “It’s rare, rare, rare, rare, rare. I can’t remember the last time it happened,” said one senior trader. “It’s not hugely disruptive because there’s different timings across [exchanges in] Europe anyway. But we could’ve all stayed in bed an extra hour.”

“Everything just goes on hold,” another equities trader said. “We’ll forget it all in three days.”

David Schwimmer, a former Goldman Sachs banker, starts as the LSE's new chief executive in August. – Copyright The Financial Times Limited 2018