ASX Ltd. suspended a trial of intraday stock auctions for some less actively-traded companies after a system error caused it to fail on the first day, the operator of Australia’s biggest exchange said.
The first auction took place at noon yesterday, while the second, scheduled for 2 p.m., did not because of a system clash with the opening of some warrants, Kristen Kaus, a spokeswoman for ASX Ltd. said in an e-mail today. The trial, which started yesterday and was intended to last three months, has been suspended until further notice. There is no time frame to restart the auctions, Kaus said.
“The complication arose due to timing of the intra-day auction, which was to occur at exactly the same time as the opening for warrants,” Kaus said. “When the two instructions entered the system at the same time, as was the case yesterday, the second instruction was not able to execute, so the 2pm intraday auction did not occur.”
The warrants traded without incident and the stocks in the trial continued trading as usual, Kaus said. The auctions, intended to narrow spreads by bringing buyers and sellers together at a specific time, are part of several reforms ASX has made to its trading platform since Chi-X Australia Pty became its first competitor in 2011. ASX had planned to host for about 37 companies including Aditya Birla Minerals Ltd. and Argo Investments Ltd.
“Our technicians are currently working on a solution to be implemented as soon as possible,” Kaus said.
Stock auctions use computer algorithms to match as many buyers and sellers of stocks at a specific time in the same way opening and closing prices are determined at the exchange.
The London Stock Exchange already holds intra-day auctions for less-traded stocks, hosting four a day.