Perhaps the most curious part from the just released and detailed Nasdaq post-mortem is the following, which appears to be an attempt to answer our remaining question from yesterday [5]: "At approximately 12:03 p.m., Eastern Time (ET), the UTP SIP ceased dissemination via all outbound UTP Quote channels. The UTP Trade feeds were not impacted by this outage and continued to remain operational. The UTP SIP has no evidence of an attempted intrusion into SIP systems or of an unusual burst of quotation or trading messages in connection with yesterday's events." No evidence, except for these [6](and many more) locked bids and asks and the associated Nasdaq trading radio silence.
[7]
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The "explanations" continue.
From Nasdaq [8]:
What happened to UTP SIP on Thursday, August 22, 2013?
On Thursday, August 22, 2013, the UTP SIP experienced issues disseminating quote data on the UTP Quotation Data Feed (UQDF). The UTP SIP experienced connectivity issues with a UTP Participant that led to degradation of a piece of SIP software and in the ability of the UTP SIP to disseminate consolidated quotes. At approximately 12:03 p.m., Eastern Time (ET), the UTP SIP ceased dissemination via all outbound UTP Quote channels. The UTP Trade feeds were not impacted by this outage and continued to remain operational. The UTP SIP has no evidence of an attempted intrusion into SIP systems or of an unusual burst of quotation or trading messages in connection with yesterday's events.
Responding to the SIP issue, and in order to protect the integrity of the markets, The NASDAQ Stock Market ("NASDAQ"), in cooperation with the UTP Operating Committee, invoked the established procedures for "Emergency Market Conditions System Related to the UTP SIP". All UTP Participants agreed and approved the recommendation by NASDAQ to issue a regulatory halt for all trading in NASDAQ-listed securities (Tape C).
The technical issues with the UTP SIP were resolved 30 minutes after identification. For the remaining period of time, NASDAQ, UTP Participants, regulators and market participants coordinated to ensure an orderly re-opening of trading in NASDAQ-listed securities. Trading resumed and the balance of the trading day finished in normal course.
What was the timeline of the issue?
Below is a timeline of the UTP SIP issues that occurred (all times ET):
- 11:48 – The UTP SIP experienced intermittent outages across multiple UQDF channels
- 11:59 – Opened a call with the exchange UTP participants
- 12:03 – The UTP SIP experienced an outage on all UQDF channels
- 12:24 – The UTP SIP resolved the issue and the SIP environment was stable
- 14:00 – After consultation with NASDAQ, the UTP Participants, market participants and regulators the UTP SIP successfully reestablished connectivity and began the return to an orderly market
- 15:25 – All quoting and trading resumed in Tape C securities
Why was data not disseminated once the issues were resolved?
The UTP SIP technical issues were resolved at 12:24, ET. Although the data feeds were operational, NASDAQ, as the listing market of Tape C securities, worked with UTP Participants, other market participants and regulatory entities to evaluate scenarios to effectively re-open the market. Once there was an accepted plan for re-opening the market, connectivity to the UTP SIP was made available to the UTP Participants.
How were subscribers notified of the issue?
NASDAQ, in coordination with the UTP SIP, posted [9] and issued public notifications indicating that the UTP SIP was experiencing issues.
What is the resolution?
The UTP SIP isolated the issue and made a configuration change that allowed for the UTP SIP to handle a controlled recovery.