Error Prompts Nearly Full-Day Shutdown of ISE Options Markets

The two U.S. options markets run by International Securities Exchange Holdings Inc. were closed for most of Monday’s session due to a technology malfunction.

The International Securities Exchange and its smaller sibling, ISE Gemini, were halted at about 9:45 a.m. New York time and never reopened, said spokeswoman Molly McGregor. The venues had accounted for about 12 percent of all U.S. options trading in December, according to Options Clearing Corp. data.

“ISE and ISE Gemini experienced a connectivity disruption and we subsequently made the determination to halt both markets,” McGregor said in a midday e-mail. Later, she said ISE “will work with members to test connectivity to prepare for a normal resumption of trading tomorrow morning.”

The problem happened on the same day New York-based ISE, a unit of Deutsche Boerse AG, was scheduled to upgrade its ISE T7 trading system, according a message it sent traders. McGregor declined to comment on whether the upgrade and the malfunction were related.

ISE was also forced to temporarily close its platforms less than two months ago. A network connectivity interruption shortly before 3 p.m. on Oct. 23 prompted it to halt the rest of that day’s trading.

Securities and Exchange Commission Chair Mary Jo White has made dealing with equity exchange malfunctions a key part of policy for improving markets. The agency’s staff has “closely focused on certain market infrastructure systems that are ‘single points of failure’ that can halt or severely disrupt trading when a problem occurs,” she said in a June 5 speech.

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