Chi-X Europe, operator of the largest pan-European equity multilateral trading facility, has criticized the London Stock Exchange (LSE) for putting its market into auction status when the system broke down for more than three hours on November 26, reported Reuters.
Chi-X said several firms’ trading systems treated the auction status like a normal market event such as the daily closing auction. In contrast, on November 9 the LSE stopped trading during a partial systems failure and subsequently the member firms switched to other venues to trade UK stocks.
Chi-X called on the Financial Services Authority to ensure the continuation of trading and an orderly market. In a statement Chi-X said: “The auction status restricted investors’ ability to trade by not enabling participants to seek a reference price on another venue. We call for the LSE and any other market of listing to close their market when outages occur to allow market participants to continue trading.”
Nasdaq OMX also called for standardization of market data across Europe. Charlotte Crosswell, president of Nasdaq OMX, said: “This would enable trading to continue even if one market fails to operate. We are supportive of the European Commission further investigation this issue.”
However, a spokesman of the LSE, said: “Our decision was a result of customer feedback. Some were experiencing connection issues while others were not, and customers requested for the market to be put into auction status so that there would be a level playing field,” reported the news agency.
