Backbone of U.S. Stock Trading Is Poised for Upgrade

Photographer: Pete Marovich/Bloomberg

U.S. Securities and Exchange Commission Chairman Mary Jo White testifies during a House Financial Services Committee hearing in Washington, D.C., on May 16, 2013. Close

U.S. Securities and Exchange Commission Chairman Mary Jo White testifies during a House... Read More

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Photographer: Pete Marovich/Bloomberg

U.S. Securities and Exchange Commission Chairman Mary Jo White testifies during a House Financial Services Committee hearing in Washington, D.C., on May 16, 2013.

Following malfunctions that froze U.S. stock and options markets in the last year, the systems that serve as the backbone for trading are getting closer to an upgrade, according to two people with direct knowledge of the matter.

IntercontinentalExchange Group Inc. (ICE)’s SIAC unit, Deutsche Boerse AG’s International Securities Exchange and Miami International Holdings Inc.’s MIAX Options were picked as the three final candidates to run the options industry’s main price feed OPRA, and make it faster, less costly and more reliable, according to the people, who asked to not be named because the decision hasn’t been made public. Within a couple months, a separate committee overseeing the distributor of prices for Nasdaq-listed shares will start soliciting bids from firms willing to upgrade that service, one of the people said.

Little-known before last year, disruptions in these data disseminators are capable of bringing the world’s largest securities market to a halt. The Nasdaq (CCMP) OMX Group Inc. system broke down Aug. 22, preventing trading in thousands of companies including Apple Inc. and Google Inc. for three hours. OPRA, formally known as the Options Price Reporting Authority, also malfunctioned last year, disrupting U.S. options trading.

The Nasdaq outage prompted U.S. Securities and Exchange Commission Chairman Mary Jo White to demand market operators make their technology more resilient.

Eric Ryan, a spokesman for ICE; Molly McGregor, a spokeswoman for the International Securities Exchange; and Shelly Brown, an executive at MIAX, declined to comment.

SIAC currently runs OPRA. Nasdaq is in charge of the feed that distributes prices for the corporations it lists, known as the securities information processor.

To contact the reporter on this story: Nick Baker in Chicago at nbaker7@bloomberg.net

To contact the editors responsible for this story: Nick Baker at nbaker7@bloomberg.net Emma O’Brien

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