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NYSE says it would take over Nasdaq stock quote system

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[January 16, 2014]  By John McCrank

NEW YORK (Reuters)  NYSE Euronext offered on Wednesday to take over the data processor at the center of the massive Nasdaq trading outage last August after Nasdaq OMX Group Inc <NDAQ.O> indicated it would stop running it.

NYSE Euronext "would be happy to" run the Nasdaq securities information processor (SIP) that provides investors with stock quotes and last sale prices, Duncan Niederauer, chief executive of NYSE Euronext, told CNBC on Wednesday.

The IntercontinentalExchange Group <ICE.N> unit operates its own SIP.

Nasdaq recently gave the committee that governs the SIP that provides data for Nasdaq-listed stocks a two-year notice that it will stop running the system, Reuters reported on Tuesday.

A software glitch crippled Nasdaq's SIP in August, forcing the exchange to halt trading on stocks it lists.

Soon after, U.S. Securities and Exchange Commission Chair Mary Jo White ordered the exchanges to come up with new protocols to improve the resiliency of the processors.

Nasdaq presented the SIP committee, which is made up of members from all of the U.S. exchanges, with a list of 10 recommendations to improve the SIP, including expanding its capacity, upgrading the testing environment for the system, and enhancing information security.

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It also asked that the SIP be registered as a limited liability company (LLC) and a formal contract be signed regarding Nasdaq's operational duties.

The enhancements would take around two years to complete, but so far the committee has not given the go-ahead on any of the recommendations, sources told Reuters.

Frustrated by the slow pace of the negotiations with the SIP committee, Nasdaq gave its two-year termination notice of its agreement to run the system, but said it would continue trying to reach a deal in the meantime.

(Editing by Sophie Hares)

[ 2014 Thomson Reuters. All rights reserved.]

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