Investors react to Toronto stock market outage

Bloomberg – A 40-minute outage on three exchanges brought Canadian stocks trading to a halt, leaving some investors frustrated and others refusing to place orders even after they reopened.

Trading on the Toronto Stock Exchange, TSX Venture and Alpha Markets was halted at approximately 10:30 AM New York time and resumed at 11:10 AM. All three exchanges are owned by TMX Group Ltd. (X), which stopped trading due to a connection issue that affected order entry.

“I feel like I’m trading on a third-world exchange,” said Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners. “I have multiple orders between $20 million and $40 million that I cannot fulfill. He added during the business outage.”

TMX Group spokeswoman Catherine Key said by phone that the exchange did not know the cause of the failure and was still investigating. The exchange sent out its first notice that it was in trouble shortly after 10 am. TMX Group shares erased their earlier gains, dropping about 0.6%.

Kee confirmed that the problem started with a problem that affected the trading of stocks with indices starting with the letters M to S. That would have affected stocks of major companies, including Manulife Financial Corp.MFC) and Suncor Energy Inc. (Song).

Laura Lau, chief investment officer at Toronto-based Brompton Funds, said she had decided not to trade on the Canadian exchange for the rest of the day because the exchange had not yet explained the cause of the problem. “I don’t want to run now,” he said.

Lau compared Tuesday’s “extremely disturbing” outage to Rogers Communications Inc.’s network outage. (RCI.B) that caused problems with Canada’s payment systems, ATMs, and phone connections.

“In Canada, we have counties of Rogers and we have counties of this,” Lau said. “I don’t want Canada to have a reputation for blackouts.”

The total volume of 236 stocks in the S&P/TSX Composite Index is 34% below the 30-day average for this time of day. Nearly 136 million shares were trading as of 1:28 p.m. in New York, compared to an average of 206 million last month. Based on this path, today’s trading volume will end at around 286 million, the lowest since July 4, according to data compiled by Bloomberg.

TMX Group is the dominant player on Canadian stock exchanges, although it now has some competition from Cboe Global Markets Inc. (CBOE), which last year acquired the parent company of smaller TMX competitor NEO Exchange.

The last time the Toronto Stock Exchange experienced a major disruption to operations was during the fall of the COVID-19 pandemic in February 2020, when an outage occurred due to a system capacity issue within the messaging technology component.. The outage came amid a week of global market downturns due to concerns about the spread of the coronavirus. CEO John McKenzie apologized at the time, saying the company’s “absolute goal” was to maintain reliability.

The S&P/TSX Composite was up 0.7% to about 19,557 points as of 1:30 pm.

With the help of Matt Turner.

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