Toronto Stock Exchange to Reopen Today After Hardware Failure

The Toronto Stock Exchange will resume operations this morning after a hardware failure shut down trading for more than two hours Friday afternoon on Canada’s main stock and derivatives bourses.

The outage, which began Friday at 1:37 p.m. on the Montreal Exchange derivatives market and spread two minutes later to TMX Group Ltd.’s equity exchanges, was due to a failure in a central storage appliance of the trading system. The failure wasn’t the result of a cyber-security attack, the Toronto-based company said Saturday in a statement.

The issue impacted both primary and backup parts of the system, preventing the backup procedures from engaging, the firm said. That prompted TMX to shut down trading for the rest of the day, ahead of the normal close of trading at 4 p.m.

“Our team took immediate action to diagnose the problem and communicate with all of our participants while determining the cause and impacts," TMX Chief Executive Officer Lou Eccleston said in the statement. “Due to the timing and the nature of the issue, we made the difficult but necessary decision to shut down trading for the rest of the day.”

TMX said it began remediation measures that afternoon, which included replacing the defective storage module, verifying the integrity of all impacted databases, and conducting a start-up validation of the trading system. The exchange owner said it couldn’t engage disaster recovery systems in time to ensure an orderly market re-open and closing session.

“TMX is committed to applying the lessons learned from this incident to help us prevent such issues from recurring in the future," Eccleston said.

TMX-owned exchanges, which include the TSX Venture for small companies and TSX Alpha, accounted for about 61 percent of the dollar value of stocks traded in Canada in March, according to data from the Investment Industry Regulatory Organization of Canada. Fewer than 575 million shares traded Friday, the slowest session since July 24, according to data compiled by Bloomberg.

The shutdown prompted traders to turn to rival exchanges to place orders, including Nasdaq Inc. Canadian equity trading is spread out across a variety of trading platforms, as it is in the U.S., allowing exchanges to pick up the slack if one fails.