The London Stock Exchange (LSE) was forced to extend trading by over an hour yesterday after a technical issue with its real-time data delivery application Infolect threw the market into confusion.
In a statement the LSE says the technical issue within Infolect "affected the ability of member firms to fully participate in continuous trading and the subsequent closing auctions".
The outage occurred just before 4pm yesterday - 30 minutes before market close - resulting in traders being left without reliable prices for the FTSE 100 and all the exchanges' indices.
The problem led share prices to go awry, with the FTSE 100 appearing to have jumped by two per cent in the late afternoon, when in fact it was down 1.3%.
The LSE also had to extend the closing auction until 6pm to allow dealers to close their positions, but some still closed for the day with trades remaining un-executed.
The exchange insists the problem was not to do with its new TradElect dealing system but a connectivity issue with Infolect.
"While the platform remained operational and prices continued to be disseminated to the market as usual, connectivity issues affected a number of firms placing orders," says the LSE in a statement.
The exchange says the cause of the technical issue has been identified and a solution has been implemented.
The glitch is particularly embarrassing for the LSE as it comes just a week after the introduction of MiFID, which brings new competition from low-cost upstarts. The LSE has been touting its technology in an attempt to fend off competition from new ATSs and bank-backed networks that are looking take advantage of the MiFID regulations.