Nasdaq 2.0: Exchanges will update software after outages
An upgrade may be coming for of the technological infrastructure gumming up the works on major U.S. exchanges, including one three-hour outage last August, according to an article in The Wall Street Journal.
The upgrade will focus on setting up faster backup systems for security information processors (SIP), networks that send information about quotes and trades made on exchanges, the paper reported.
These networks, like much of the software that runs the exchanges, tend to be old: The SIP still uses Microsoft Windows 2003 for its operating system.
So far, what has stood in the way of needed upgrades is the fact that SIP's are a "tightly regulated monopoly" according to one consultant quoted by the Journal, and the side business many SIP owners also have in charging higher premiums to deliver information faster to specific high-paying customers such as banks and hedge funds.
The discussions held among thirteen exchanges to upgrade the system stem in part from an SEC order issued in September to review the SIPs after the outage.
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