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TORONTO (Reuters) – Canada’s stock market, the world’s sixth-largest, abruptly shut down on Friday after an outage cut market participants off the main exchanges but will resume trading on Monday after resolving “internal technical issues,” the exchange operator said.
TMX Group Ltd (X.TO), which operates the main Toronto Stock Exchange and smaller trading platforms around Canada, said in a series of Tweets that all users had been “equally impacted and are unable to connect to our exchanges” and it decided to shut down markets for the remainder of the day.
The operator said it had identified the issue and was working to fix it, adding that trading would resume at its regular hour next week.
The outage was not due to “a hack,” a Toronto Stock Exchange spokesman said.
Shutdowns are rare occurrences because exchanges typically have back-up systems that quickly come online when there is a technical failure.
The Toronto Stock Exchange’s last major outage occurred nearly a decade ago, when a system fault linked to data feeds shut down trading for a full day in 2008, including on the small-cap TSX Venture Exchange.
“In true Canadian fashion, most traders declared ‘beer o’clock’ when they saw that the TMX was closed,” said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments. “It certainly appears to be a technical glitch but there does not seem to be a lot of information about exactly what caused it.”
The TMX, which has been vying to host Saudi Aramco’s IPO overseas listing and exploring partnerships with bourses around the world, declined to elaborate on that nature of the technical issues.
The Ontario Securities Commission said it was in contact with the TMX, adding: “We continue to monitor and watch the situation closely.”
While such failures are not common, there is typically at least one major exchange outage a year, said Eric Johnson, a technology expert who is dean of Vanderbilt University’s Owen Graduate School of Management.
“Sometimes people feel like these systems are infallible. That is certainly not the case,” Johnson said. “You have all this super-fast, high volume trading. That really puts pressure on the systems to maintain an unusual level of reliability.”
Outages can inconvenience investors and also prove expensive for the exchanges themselves.
The U.S. Securities and Exchange Commission, for example, last month fined Intercontinental Exchange Inc’s (ICE.N) New York Stock Exchange and two affiliate exchanges a total of $14 million for multiple regulatory failures related to disruptive market events.
The U.S.-listed shares of several Canada-based firms continued trading even as their Toronto-listed securities were idled by the outage. Blackberry Ltd’s (BB.TO) NYSE-listed shares (BB.N), for example, were still trading hours after the company’s TSX-listed shares last traded at 1:38 p.m. EDT.
Toronto-based TMX first flagged the issue on Twitter shortly after 2 p.m. EDT, updating numerous times through the hour to say the issues were persisting and that an investigation was underway.
The Toronto Stock Exchange’s S&P/TSX Composite Index .GSPTSE, the main Canadian index, was up 0.2 percent at 15,688.93 before the issues began. The market operates between 9:30 a.m. and 4 p.m. EDT.
“It is fatal for them (TMX) for today,” said Peggy Bowie, senior trader at Manulife Asset Management. “Orders have been shifted to other markets and my understanding is everybody will use the last board lot traded, regardless of where it has been traded, for the close.”
The TMX said it would provide a complete list of closing prices later on Friday.
Closing prices for Friday’s truncated session will be determined by the final so-called “board lot” traded price, which refers to trades of at least a certain size. For stocks priced at least $1 a share, a board lot is 100 shares or more. Penny stock board lots have minimal sizes of 500 or 1,000 shares. TMX operates numerous Canadian exchanges, including the TSX Venture Exchange, as well as the Montreal Exchange, which trades derivatives, options and futures.
Reporting by Julie Gordon, Fergal Smith, John Tilak, Jim Finkle in Toronto, Saqib Ahmed, John McCrank in New York; Writing by Amran Abocar; Editing by Tom Brown and Dan Grebler