Dec. 17 (Bloomberg) -- TMX Group Inc. halted trading on the Toronto Stock Exchange and TSX Venture Exchange following a computer glitch that prevented quotes from being disseminated.

There is no estimate for when trading will resume, Sylvin Gauthier, a TMX spokesman in Montreal, said in an interview.

The interruption of more than three hours may push investors to competing platforms, said Dundee Securities Corp. analyst John Aiken. Four alternative trading systems have launched in Canada in the past year since September 2007. An average of $5.79 billion in shares changed hands in Canada each day this year, according to data compiled by Bloomberg.

“This is the worst interruption that I have ever seen,” Aiken said in an interview. “Reputationally, this definitely gives a boost to everybody but TMX Group.”

The newer systems are Alpha Trading Systems, whose owners include Royal Bank of Canada and Toronto-Dominion Bank, Pure Trading, owned by the Canadian National Stock Exchange, Perimeter Financial Corp.’s Omega ATS and Chi-X Canada, owned by Nomura Holdings Inc.’s Instinet.

“There’s absolutely no visibility on anything,” said Paul Hand, managing director of equity trading at RBC Capital Markets in Toronto. “Other than a few U.S. quotes, on the interlisted stocks, it’s pretty opaque. Everyone’s entitled to a few mistakes but it depends on the frequency. The Street will begin to make some snide comments.”

Upgraded

Interruptions on The Toronto Stock Exchange were frequent in the late 1990s, when “the old systems of the exchange collapsed under the weight of the tech bubble,” Hand said. TMX Group has upgraded systems since then and it has been “mostly going pretty well,” he said.

Trading was also halted by a computer glitch in London, leaving traders unable to buy or sell stocks for most of the day.

Canada’s stock benchmark, the Standard & Poor’s/TSX Composite Index, has tumbled 37 percent in 2008. That would be the steepest annual decline since 1931.

Some of the larger “interlisted” stocks including Research In Motion Ltd., the maker of the Blackberry e-mail phones, do as much as 75 percent of their trading in the U.S., according to a report from Credit Suisse analyst Ana Avramovic in New York, dated Dec. 16.

Research In Motion fell 1.3 percent to $39.43 in 11:31 a.m. trading on the Nasdaq Stock market.

Pure Trading was functioning normally, Chairman Ian Bandeen said in an interview.

As of 10:51 a.m. Pure had 9 million shares trading on its system, “ahead of average,” according to Bandeen. That compares with an average daily volume of 432.5 million shares traded on the Toronto Stock Exchange in 2008.

“The situation is pretty much in limbo,” Bandeen said. “The trading community is trying to figure out what to do at this stage. This kind of thing has never happened before.”

Alpha Trading Systems also said it was trading.

To contact the reporters on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net; Doug Alexander in Toronto at dalexander3@bloomberg.net.

Last Updated: December 17, 2008 12:14 EST