The exchange stopped trading at the market open due to the technical glitch, re-opened MEFF at 10:30 a.m. local time and suspended activity again as the problems persisted, Pablo Malumbres, an exchange spokesman, said today. A 15-minute auction preceding full resumption of transactions began at 3:55 p.m., spokesman Oscar Moya Pescador wrote in an e-mail.
Technology-driven mishaps have grown more frequent at exchanges as the complexity of market structure increases and demand grows for faster access with greater capacity. Computer malfunctions played roles in Knight Capital Group Inc.’s $457 million trading error in August, the mishandling of Facebook Inc.’s initial public offering on the Nasdaq Stock Market, and Bats Global Markets Inc.’s withdrawn IPO in March.
Last year, NYSE Euronext (NYX) suffered six breakdowns in European trading in less than two months. A glitch halted derivatives trading on the company’s Liffe system on Aug. 4., 2011, during Europe’s worst selloff in 15 months.
On Aug. 6, BME suffered a fault that halted trading for more than 4 1/2 hours. That breakdown came months after BME upgraded its systems, boosting speed and capacity as it seeks to stave off rivals. Alternative trading systems such as Chi-X Europe Ltd. and Bats Europe began operations after new rules in 2007 opened the door to competition with traditional exchanges such as BME, Deutsche Boerse AG (DB1) and NYSE Euronext.
Madrid-based BME, home to companies such as Banco Santander SA and Telefonica SA, has suffered less from equity competition than some traditional exchanges. Plataforma Alternativa de Valores Espanoles, or PAVE, which sought to create an alternative trading system in Iberian markets, halted operations this year due to the difficult financial environment in Europe.
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