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Last updated: August 6, 2012 2:39 pm
Bolsas y Mercados Españoles, the Spanish bourse, suffered a rare outage lasting more than four and a half hours on Monday.
Trading in stocks on the Ibex 35, in which BME has a market share of more than 90 per cent, was halted at 10.05am Madrid time and restarted at 2.50pm. BME said it would not be making a statement about the glitch.
The glitch was a rare one for the BME, which has made several high-profile technology upgrades in recent months, even though the bourse has been reluctant to compete with rivals in rolling out incentives to attract high-frequency traders.
Other exchanges and alternative venues have keenly built superfast trading platforms and co-location services, where traders put their computers next to an exchange’s trade matching system to cut the time it takes for orders to be done.
The BME has followed suit, although its platform remains slower than many of its European rivals. It has stressed it did not want to “be part of the arms race” between exchanges to attract high-frequency traders and focused on the reliability of its systems for all types of market participants.
Antonio Zoido, chief executive, told the Financial Times in June: “When was our last [technical] glitch? I can’t remember.”
Unlike other incumbent exchanges across Europe, BME has resisted fierce competition from rival alternative trading systems such as BATS Chi-X Europe and maintained its grip on the trading of Spanish equities.
Competition elsewhere has eroded the monopoly positions of incumbent national exchanges.
While BATS, the region’s largest share trading venue, has grabbed a market share of around 35 per cent in London, it has been unable to make the same headway in Spain. Critics have argued that obstacles preventing proper competition remain, although BME counters that it has been competitive and followed European rules.
In recent months prominent exchanges bosses have cautioned that the industry risks losing sight of the right balance between high-frequency trading and other market participants less interested in speed, such as asset managers placing longer-term bets on company fundamentals.
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