Toronto Stock Exchange Shuts Down Early on TMX Market Issues

(Bloomberg) -- TMX Group Ltd. was forced to shut down the Toronto Stock Exchange and its derivatives market early after the owner of Canada’s largest bourses experienced technical problems for most of the afternoon. Trading is expected to resume Monday.

Trading stopped at 1:39 p.m., and the exchange operator later said on Twitter that the bourse won’t re-open for the day. Fewer than 575 million Canadian shares traded Friday, the slowest session since July 24, according to data compiled by Bloomberg.

“All users are equally impacted and unable to connect,” the Toronto-based company said. TMX Group operates the TSX, TSX Venture Exchange, Montreal Exchange and TSX Alpha Exchange. TMX said it has identified the “internal technical issue” and expects to resume regular trading on Monday, according to a statement.

TMX-owned exchanges accounted for about 61 percent of the value of stocks traded in Canada last month, according to data from the Investment Industry Regulatory Organization of Canada. Trading normally closes at 4 p.m.

“In my 42 years in the business, this may have happened in the past, but if it did, I can’t remember it,” said Norman Levine, managing director at Toronto-based Portfolio Management Corp.

Traders turned to rival exchanges to place orders, including Nasdaq Inc. Canadian equity trading is spread out across a variety of trading platforms, as it does in the U.S., meaning that when one exchange breaks, others can pick up the slack.

“Our systems have ample spare capacity, and run off the same technology as Nasdaq in the U.S.," Nasdaq said in a statement, referring to its three exchanges in Canada.

Diverse Options

Craig Basinger, chief investment officer at Richardson GMP, said Friday’s trading problems show the upside of having multiple exchanges.

“There’s a lot of downsides to having all these different exchanges because it obviously increases operational costs and quote costs and that kind of thing, but it’s times like this that I suppose it’s a very positive thing,” Basinger said. “If you go back a number of years when everything was traded on Toronto then we really would be shut down.”

Levine said he just sold C$100,000 ($77,900) worth of stock for a client this morning, including preferred shares.

“There have got to be people out there who need things sold today and they’re screwed,” he said.

Before trading stopped, the S&P/TSX Composite Index was up 0.2 percent to 15,668.93, on track for a third straight gain and its highest close since March 21. TMX Group shares fell 1.4 percent to C$76.82.

The problem follows trading issues at the New York Stock Exchange earlier this week. The NYSE said Wednesday afternoon that Amazon.com Inc. and Alphabet Inc. wouldn’t trade for the rest of the day, citing a technical problem.

--With assistance from Nick Baker

To contact the reporter on this story: Kristine Owram in Toronto at kowram@bloomberg.net.

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, David Scanlan, Jacqueline Thorpe

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