NYSE to run software tests for trading firms ahead of Alibaba IPO

NEW YORK Tue Jul 1, 2014 11:16pm IST

People play in a hall inside Alibaba's headquarters in Hangzhou, Zhejiang province, April 23, 2014. REUTERS/Chance Chan/Files

People play in a hall inside Alibaba's headquarters in Hangzhou, Zhejiang province, April 23, 2014.

Credit: Reuters/Chance Chan/Files

Related Topics

Stocks

   

NEW YORK (Reuters) - The New York Stock Exchange said it will hold a test run of Alibaba Group Holding's highly anticipated market debut, reflecting the securities industry's focus on risk controls after a raft of technical snafus in recent years.

NYSE, owned by Intercontinental Exchange Inc, said in a note to traders on Tuesday it would allow firms to test their trading software ahead of the initial public offering of Alibaba on July 12 for a listing on the New York Stock Exchange.

The Chinese e-commerce company's trading debut this summer could be the largest-ever technology IPO in the U.S., possibly eclipsing Facebook Inc's $15 billion share sale in May 2012.

Facebook's trading debut on Nasdaq OMX Group's exchange was plagued with software problems as massive volumes of orders came in, setting off a chain of events that market-making firms said cost them a combined $500 million.

Nasdaq, which was fined $10 million by the U.S. Securities and Exchange Commission over the problems, said it would voluntarily compensate firms that had been harmed up to a total of $62 million.

NYSE regularly conducts systems testing during the weekends but it was only last October, ahead of Twitter Inc's market debut, that it opened up for an IPO simulation requested by member firms, many of which participated in Facebook's IPO.

During the Twitter IPO simulation, NYSE was testing mainly for two things: To see if its systems could handle the amount of message traffic that might be generated by the IPO; and to make sure that once the IPO took place any firms that placed orders would promptly receive the reports telling them that their orders had been executed.

The Facebook incident was one of a number of high-profile technology-related problems that have roiled markets and weighed on investor confidence in recent years, placing a bigger focus on operational risk by regulators and market participants.

(Reporting by John McCrank; Editing by Bernadette Baum)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage