The New York Stock Exchange said it will hold a test run of Alibaba Group Holding's highly anticipated market debut, reflecting the securities industry's focus on risk controls after a raft of technical snafus in recent years.
Continue Reading Below
NYSE, owned by Intercontinental Exchange Inc (NYSE:ICE), said in a note to traders on Tuesday it would allow firms to test their trading software ahead of the initial public offering of Alibaba on July 12 for a listing on the New York Stock Exchange.
The Chinese e-commerce company's trading debut this summer could be the largest-ever technology IPO in the U.S., possibly eclipsing Facebook Inc's
Facebook's trading debut on Nasdaq OMX Group's
Nasdaq, which was fined $10 million by the U.S. Securities and Exchange Commission over the problems, said it would voluntarily compensate firms that had been harmed up to a total of $62 million.
NYSE regularly conducts systems testing during the weekends but it was only last October, ahead of Twitter Inc's
During the Twitter IPO simulation, NYSE was testing mainly for two things: To see if its systems could handle the amount of message traffic that might be generated by the IPO; and to make sure that once the IPO took place any firms that placed orders would promptly receive the reports telling them that their orders had been executed.
The Facebook incident was one of a number of high-profile technology-related problems that have roiled markets and weighed on investor confidence in recent years, placing a bigger focus on operational risk by regulators and market participants.