'Stale Data' Forces Nasdaq Stocks to Trade in Dark
January 3, 2013
For eleven minutes Thursday, stock market data feeds for securities listed on the Nasdaq Stock Market shut down, as Nasdaq investigated what it termed “stale data” in a message to customers.
The “stale data” on the UTP SIP, better known as Tape C, meant trading in stocks listed on Nasdaq continued, but weren’t recorded in real time, according to market participants.
“This occurred eight minutes before the Federal Open Market Committee (FOMC) released the minutes from its latest meeting so the timing wasn’t good,” notes Eric Hunsader, founder of Nanex, a market data aggregator. “Some big block trades were carried out when Tape C went dark, and no one saw them.”
Nasdaq was not the only exchange impacted. A BATs spokeswoman says that both BATS national exchanges were also affected, for instance.
Section 12(f) of the Securities and Exchange Act of 1934 permits Nasdaq to extend “unlisted trading privileges” (UTP) for its listed securities to other exchanges. Under the UTP Plan, all U.S. exchanges that quote and trade NASDAQ-listed securities must provide their data to a centralized securities information processor (SIP) for data consolidation and dissemination.
Tape C is administered by Nasdaq as well as other exchange and associations which determine policy matters and oversee system operations.
Both the UTP Quote Data Feed (UQDF), which provides continuous quotations from all market centers trading Nasdaq-listed securities, and the UTP Trade Data Feed (UTDF), which provides continuous last sale information for all markets centers trading Nasdaq-listed securities, were out while trading in such stocks as Apple and Netflix appeared to stop trading.
But its market system status notices said the problems with the data feed extended from 1:42 to 1:53. p.m. At that point, Nasdaq said, “The issue with the UQDF and UTDF feeds affecting multiple channels has been resolved. All systems are operating normally.’’
Nasdaq spokesman Robert Madden declined to comment further.
BATS also issued this alert at 1:39 p.m.: “Please be advised that BATS is currently investigating issues sending and receiving quotes to and from the UTP SIP,” at BATS is communicating with the UTP SIP as they work to resolve the issue. Will advise once UTP SIP issues are resolved.”
At 13:57:54, BATs reported “Issues quoting and printing to the UTP SIP have been resolved. All BATS systems are operating normally.”
“This didn’t occur all at once,” says Hunsader. “Different exchanges were affected for different lengths of time.”