'Unacceptable': Investors react to Toronto stock market outage

‘Unacceptable’: Investors react to Toronto stock market outage

A 40-minute outage across three exchanges brought stock trading to a halt in Canada, leaving some investors frustrated and others refusing to place orders even after they reopened.

A 40-minute outage across three exchanges brought stock trading to a halt in Canada, leaving some investors frustrated and others refusing to place orders even after they reopened.

Trading halted on the Toronto Stock Exchange, TSX Venture and Alpha Markets at approximately 10:30 a.m. New York Time and resume at 11:10 a.m. All three exchanges are owned by TMX Group Ltd. , which has stopped trading due to a connection issue affecting order entries. The exchange sent its first notification that it was having trouble shortly after 10 am

John McKenzie, CEO of TMX Group, said in an interview with BNN Bloomberg. “We’ve identified what it is and are working to get around it.” He apologized to clients for stopping trading and for “not meeting their expectations and not meeting our expectations.” TMX Group shares closed down 1.3% on Tuesday.

McKenzie said the company made the decision to stop trading in an effort to fix the issue and migrate operations to a disaster recovery backup site, the first time the exchange has used this system.

“I feel like I’m trading on a third-world exchange,” said Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners. “I have multiple orders for $20 million to $40 million that I cannot fulfill,” he added during the trading halt.

Laura Lau, chief investment officer at Toronto-based Brompton Funds, said she had decided not to trade on the Canadian exchange for the rest of the day because the exchange had yet to explain the cause of the problem. She said, “I don’t want to be executed now.”

Lau likened the “extremely turbulent” trading halt on Tuesday to the recent network collapse by Rogers Communications, which caused problems for Canada’s payment systems, ATMs and phone connections.

“in Canada“We have outages at Rogers and we have outages because of that,” Lau said. “I don’t want Canada to have a reputation for blackouts.”

The total volume of 236 stocks on the S&P/TSX Composite Index was 22% below its 30-day average. Nearly 320 million shares traded Tuesday, compared to an average of 409 million over the past month.

TMX Group is the dominant player on stock exchanges in Canada, although it now has some competition from Cboe Global Markets Inc. , which last year acquired the parent company of NEO Exchange, a smaller competitor to TMX.

The Toronto Stock Exchange last experienced a major trading crash during the collapse of the Covid-19 pandemic in February 2020, when the outage occurred due to a system capacity issue within the messaging technology component of the TMX trading engine. This stop came in the midst of a week-long dive into global markets with concern about the spread of Corona Virus. CEO McKinsey apologized at the time and said the company’s “absolute focus” was on staying reliable.

Today McKinsey defended the stock’s track record, saying that investments over the past two years have helped TMX Group avoid a longer downturn. “Our track record in terms of market operations is fantastic,” he said, adding that its availability “99.99% of the time” compares favorably with other major exchanges.

The S&P/TSX Composite closed 0.5% higher at around 19518 in Toronto.

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