CBOE Faces Duo of System Issues

By FOXBusiness

CBOE (NYSE:CBOE) faced system problems with one of its options exchanges and its stock exchange on Friday just a day after regulators and exchange officials met to discuss the stability of the global market structure.

The exchange operator reported a "dissemination" issue at the CBSX Stock Exchange that halted trading just slightly after 11:00 a.m. ET. It wasn't immediately clear how widespread the issue was, or how many stocks were affected, but Nasdaq OMX Group (NASDAQ:NDAQ) routed orders away from the exchange. The exchange's system status page said trading was resumed by 11:37 a.m. ET, and Nasdaq revoked its so-called "self-help" shortly thereafter.

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CBOE was already struggling with several problems on its C2 electronic options platform that appeared to start before 9:00 a.m. C2 is a subsidiary of CBOE, but actually operates under a separate license from the namesake CBOE marketplace. A spokesperson said the problem didn't affect all products, although, the exact number was unclear. Trading on C2 was halted just after 11:00 a.m., and was brought back online at 11:55 a.m. ET.

A CBOE spokesperson didn't immediately comment on what caused the problems. A Securities and Exchange Commission spokesperson declined to comment on the issue.

Friday's trading issues come after the so-called 'Flash Freeze' on August 22 that brought trading of Nasdaq-listed stocks to a halt for three hours.

"This all undermines confidence in the system and is bad for business," said Michael Block, chief strategist at Rhino Trading Partners.

Regulators and exchange officials met in Washington, D.C. on Thursday to discuss the stability of the backbone of the financial markets.

SEC Chair Mary Jo White called on exchange operators to "identify a series of concrete measures designed to address specific areas where the robustness and resilience of market systems can be improved, including the systems that were at the core of last month’s trading interruption."

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