The London Stock Exchange has completed its investigation into the cause of the downtime at its Turquoise trading platform, which crashed for two hours in November, but has been scant with the details.
The exchange has also announced the revised timeline for migrating its main market to its MillenniumIT trading system. It will now migrate on 14 February (see below).
"The Exchange can confirm that its internal investigation into last November's trading disruption on Turquoise has now concluded. The investigation found the incident was the result of human error and the incident has now been closed," said a statement.
Turquoise, hailed as the fastest in the world, went down for two hours on 2 November 2010. Speculation has been rife and varied since the crash.
The stock exchange has not changed its stance from day one. "Investigations [into the] trading disruption on London Stock Exchange's pan-European MTF, Turquoise, have revealed that human error was to blame for the disruption that began at 08.23am this morning," it announced immediately after the crash. "The issue was swiftly isolated, and normal trading resumed at 10.30am. Preliminary investigations indicate that this human error may have occurred in suspicious circumstances."
However, the exchange has not subsequently provided any further elaboration apart from the removal of the "suspicious circumstances" claim, which had created confusion in the market.
Turquoise switched to the London Stock Exchange's MillenniumIT trading system in October last year. Because the main London Stock Exchange is close to switching to the new platform from the existing .Net-based Tradelect, the downtime inevitable fuelled speculation. The London Stock Exchange delayed the migration of the main trading venue to MillenniumIT, which originally had been planned for December 2010.
"In light of this incident, coupled with necessary network upgrades to address ultra low latency and high flow inherent in the new platform, the Group has regrettably been forced to postpone its Main Market LSE technology migration for SETS," the exchange stated. "The company now plans to move its primary trading platform to MillenniumIT as early as possible [in 2011]."
Days after the incident Computer Weekly revealed that the two-hour downtime was caused by a contractor mistakenly making a small network change in the live environment rather than the test environment. The London Stock Exchange declined to comment and has subsequently remained silent over the details of the incident, apart from today's confirmation of human error.
One source said that the sector had "mentally moved on" since the incident, but added that he believed the exchange had badly managed the flow of information.
Competitors are using the incident as a "stick to beat" the London Stock Exchange with, said Ovum analyst Rik Turner. "It gives competitors bragging rights at a time when the London Stock Exchange is trying to rebuild its reputation. It was bad enough when Tradelect was creaking without new problems."
Turner said the exchange needed to come to the market and clarify what had happened. "If it is in the business of raising credibility, it needs to say something about the problem," he said. The London Stock Exchange's stated aim is to become one of the top global trading venues."
An IT source in the trading sector said he was not surprised the stock exchange had said nothing. He said that firms in the trading sector usually said only enough to reassure people and avoided saying too much when there were technology problems. "Most problems are very small and saying too much can confuse things," he explained.
He added that the London Stock Exchange silence could suggest that a supplier was at fault. "If it was the supplier at fault and the exchange reported this, it could impact the contract with the supplier."
An IT head at a stockbroker firm, who wished to remain anonymous, said he agreed that too much information could confuse matters. "At the end of the day it is a service provider and will play its cards close to its chest."
When technology is so critical in a particular industry the management of information following technology problems is almost as important as avoiding problems in the first place. Uncertainty in the trading sector can damage reputations and allow competitors to make up ground. Whether all the details of problems should be given to customers or the gory details kept in-house is a debate worth having.
Timeline for migration of London Stock Exchange to MillenniumIT
- 24 January 2011 Early access service available
- 29 January 2011 Dress rehearsal
- 5 February 2011 Dress rehearsal
- 12 February 2011 Connectivity testing
- 14 February 2011 Migration