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A technical glitch at the New York Stock Exchange’s Arca platform this week affected the prices of hundreds of ETFs. On Monday its auction mechanism was hit by technical difficulties, affecting the pricing of a wide range of securities, include the net asset values of ETFs and the calculation of some stock market benchmarks.

Things seem to have returned to normal now. Stacey Cunningham, chief operating officer at the NYSE, wiped egg off her face and apologised to brokers and investors. By some estimates, over 1000 ETFs did not close by auction on Monday, although some of these would have been because of lack of investor interest.

The exchange is also reviewing its ETF closing prices on Monday. Trading seemed to have proceeded without problems in the course of Tuesday.

There is no list of the affected securities being made available at this time. NYSE is wisely not disclosing these, as such things can lead to expensive lawsuits. However, State Street Global Advisers said 63 of its ETFs were affected. Notably four out of the five biggest US ETFs, among them iShares Core S&P 500 and Vanguard Total Stock Market, did not close by auction on Monday, and this is very unlikely to have been due to a lack of investor interest.

The glitch forced many active traders of ETFs to either end the day with open positions or try to close them out in the after-market, where there is much less liquidity.

It is by no means the first glitch to affect the NYSE in recent months, and apart from lawyers, regulators will also be looking into the technical difficulties the exchange has been experiencing. Intercontinental Exchange, or ICE, which owns the NYSE, has admitted the NYSE is already facing possible charges from US regulators regarding another glitch which brought down equities trading for a few hours in 2015. NYSE is disputing that action.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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