Euronext Markets Halted for an Hour on Technical Malfunction

Euronext NV is investigating the cause of a technical glitch after trading on its European exchanges was halted for more than an hour today because of a technical malfunction, preventing transactions in companies ranging from Royal Dutch Shell Plc to Sanofi.

Citing a problem with market data, Euronext paused trading at 12:15 p.m. Paris time, according to a notice on its website. Trades for stocks and bonds resumed at 1:10 p.m., and for other products including exchange-traded funds at 1:15 p.m.

Technology errors may jeopardize credit ratings for exchanges, Standard & Poor’s said in September. The hour-long closure at Euronext follows a three-hour pause on Aug. 22 for thousands of U.S. stocks, including Apple Inc. and Microsoft Corp., because of an glitch at Nasdaq OMX Group Inc. In response, U.S. regulators demanded exchanges make their systems more reliable.

IntercontinentalExchange Group Inc. is in the process of spinning off Euronext, which runs markets in Paris, Amsterdam, Brussels and Lisbon. Atlanta-based ICE bought it in November with the Liffe derivatives market and New York Stock Exchange.

Recovery Systems

“This isn’t great timing given their situation with the IPO,” said Rebecca Healey, market structure analyst at Tabb Group LLC in London. “No system is foolsafe so the question must now be how robust are failure and disaster recovery systems. Given the economic constraints the industry has been under since the financial crisis, more technological investment would appear to have been made in trading tech rather than the testing and compliance of these systems.”

ICE suspended some European futures trading during the malfunction.

In August, a technical glitch halted trading on Eurex, Europe’s largest derivatives market, for about 60 minutes. The day before, an errant trade on the Tel Aviv Stock Exchange briefly wiped out almost the entire value of Israel Corp., the holding company controlled by billionaire Idan Ofer.

In China, a trading error on Aug. 16 at Everbright Securities Co. spurred a 53 percent surge in volume and a swing of more than 6 percent in the Shanghai Composite Index. Spain’s MEFF futures market stopped trading after a “connectivity issue” that lasted more than six hours in November 2012.

“The halt did disrupt trading today,” Jawaid Afsar, a trader at Securequity Ltd. in Sheffield, England, said by phone. “People I spoke to in Europe were quite frustrated. The uncertainty meant we were in a suspended state. Now that the systems all automated and computerized and nothing is foolproof, this will happen more frequently.”

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