The aftermath of the LSE's big outage

The London Stock Exchange, which has been plagued by technical glitches as of late, suffered another one in late November. The exchange was forced to suspend trading for more than three hours. Ouch. It was the third major glitch since September.

This is obviously yet another blow to the firm's image as a technology laggard. The fallout has been a bit surprising. The LSE's market share actually rose by more than 5 percentage points to nearly 63 percent of FTSE 100 stocks that day, according to Reuters. The culprit seems to be inadequate routing systems of liquidity providers. While some like Instinent were able to route elsewhere, many were not. Chi-X went so far as to accuse the LSE of thwarting efforts to re-route order traffic by throwing stocks in something called "auction status," which often happens when stocks cannot trade properly. Many firms' systems treated the move to auction status "like a normal market event such as the daily closing auction," Chi-X said.

To make matters worse, the LSE reported the day before that profits plunged 40 percent in the prior two-quarter period. Many challenges loom, even if the upstarts shake out a bit. 

For more:
- here's the Reuters article

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