NYSE Embarks on High-Stakes Technology Shift for its Exchanges
This article by Annie Massa for Bloomberg may be of interest to subscribers. Here is a section:
NYSE will take its time to move all its markets on to Pillar. NYSE Arca begins the migration on Monday, a delay from the original launch date in the third quarter of 2015. The other markets owned by NYSE Group Inc., including the New York Stock Exchange, won’t get the technology until much later with the final market probably adopting Pillar in 2017.
The slow approach shows the firm’s caution after it had to halt trading on NYSE for more than three hours last July. A botched technology upgrade was responsible for that outage.
“It will take a while to put everything on Pillar,” ICE’s chief executive officer, Jeff Sprecher, said on the company’s fourth-quarter earnings call. “We’re going to be relatively slow and deliberate.”
NYSE needs the upgrade to work. Its equity exchanges each run on different systems, unlike its main competitors -- Bats Global Markets Inc. and Nasdaq Inc. -- which use a single platform for all of their venues.
The shutdown of the NYSE in July jolted investor confidence in the technology they require to execute trades and the breakdown of BNY Mellon’s ETF pricing engine in August resulted in a massive dislocation which acted as the catalyst for the ongoing correction in stocks. NYSE Arca, a major trading venue for NYSE and Nasdaq shares as well as a considerable number of options migrate on Monday.
This represents a potential source of volatility if it is not handled perfectly. It is even more important because predatory trading systems will be looking for weaknesses they can exploit or arbitrages that might be picked up.
The VIX has pulled back to the progression of higher reaction lows evident since August and a bounce from these levels would increase potential that the short-term rally on Wall Street is meeting resistance.
Intercontinental Exchange remains in a reasonably consistent uptrend and bounced impressively from the region of the 200-day MA this week. The downside weekly key reversal posted three weeks ago suggests some additional consolidation is likely, but a sustained move below $230 would be required to question the consistency of the overall move.