Nasdaq OMX has called for improved Securities Information Processor (SIP) system testing, after a server hardware fault led to another, albeit brief, outage on the exchange.
On Wednesday, Nasdaq OMX said that it had experienced a “six-minute outage” as its Securities Information Processor – the system which receives external quote orders - failed, affecting a small number of stock symbols.
An initial investigation of the outage showed that the fault was caused by a hardware memory failure in a back-end server, occurring at 11.35 am.
However the issue was “promptly resolved”, with the system successfully failing over, and there was no major disruption to trading.
The outage follows a three-hour halt to trading in August, caused by a combination of an ‘unprecedented’ influx of quote messages being sent from rival exchange NYSE’s Arca system which overwhelmed Nasdaq's SIP, and a software fault in it's own internal infrastructure which prevented its own systems from properly failing over.
Following the outage, a 15-member Unlisted Trading Privileges Securities Information Processor (UTP SIP) committee, which includes Nasdaq OMX, convened on Wednesday to discuss plans to improve the resiliency of the SIP.
Suggestions included short-term measures to strengthen the SIP technology architecture by disconnecting the front- and back-end processors when a failover occurs. Connections can also be manually terminated if unusually high traffic is experienced on a single port, as was the case with the August 22 outage.
The SIP UTP committee commented: "The SIP will continue to work with market participants, our members, and the broader investing public, to help ensure efficient, transparent and reliable markets."