Nasdaq to administer data system behind three-hour trading halt

September 23, 2014

By Herbert Lash

NEW YORK (Reuters) – Nasdaq OMX Group Inc won a contract to administer billing and other chores for the data feed system that sparked a three-hour trading halt in Nasdaq-listed stocks last year, but a contract to build and manage the system is still undecided, the firm that oversaw bidding said on Tuesday.

Representatives from the U.S. stock exchanges and the Financial Industry Regulatory Authority, a self-funded watchdog for Wall Street, picked Nasdaq over two other firms that submitted bids, said Jordan & Jordan in a news release.

Nasdaq has always managed the securities information processor, or SIP, which consolidates quotes and last sale prices from all the exchanges into a single feed, but it expressed concerns after last year’s glitch.

The SIP became clogged with quotes in August 2013, a breakdown that led Securities and Exchange Commission Chair Mary Jo White to order the exchanges to buttress the SIP and other “single points of failure” in the U.S. marketplace.

Voting to pick a SIP administrator, which includes record keeping and the preparation of financial reports, ended last week, according to a source. The voting for managing the SIP and building it if Nasdaq is not picked has been close, but has not reached a two-thirds majority to win, the source said.

Nasdaq and another firm remain in the bidding for that job, the source said. A final vote is expected next week.

There are separate SIPs for stocks and exchange-traded products listed on the New York Stock Exchange, and for options. The SIPs provide brokers with the data they need to show clients their orders are executed at the best price available as required by the SEC.

(Reporting by Herbert Lash. Editing by Andre Grenon)

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