NYSE: This is why we halted floor trading

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Harvey Pitt: NYSE could have handled halt better
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Cashin: Painful, but right decision by NYSE
These stocks fine after NYSE halt
These stocks fine after NYSE halt

A day after halting floor trading for nearly four hours amid a technical issue, the New York Stock Exchange issued a statement explaining what happened on Thursday. (Tweet This)

The exchange said the root cause of the problem had to do with the configuration compatibility of a software update.

It added that, at 11:09 a.m., it was investigating a technical issue and decided to halt trading at 11:32 a.m. as customers continued experiencing "unusual system behavior."

Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters

Here's the full statement:

"On Tuesday evening, the NYSE began the rollout of a software release in preparation for the July 11 industry test of the upcoming SIP timestamp requirement. As is standard NYSE practice, the initial release was deployed on one trading unit. As customers began connecting after 7am on Wednesday morning, there were communication issues between customer gateways and the trading unit with the new release. It was determined that the NYSE and NYSE MKT customer gateways were not loaded with the proper configuration compatible with the new release.

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Prior to the market open, gateways were updated with the correct version of software and stocks opened at 9:30am. However, the update to the gateways caused additional communication issues between the gateways and trading units, which began to manifest themselves mid-morning. At 11:09am, NYSE issued a Market Status message that a technical issue was being investigated. At 11:32am, because NYSE and NYSE MKT were actively trading but customers were still reporting unusual system behavior, the decision was made to suspend trading on NYSE and NYSE MKT. NYSE ARCA, Arca Options and NYSE AMEX Options were not impacted by this event and continued to trade normally.

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NYSE and NYSE MKT began the process of canceling all open orders, working with customers to reconcile orders and trades, restarting all customer gateways and failing over to back-up trading units located in our Mahwah, NJ datacenter so trading could be resumed in a normal state. In consultation with regulators and industry, we determined that we would implement a complete restart and that NYSE MKT primary listings would resume trading at 3:05pm and NYSE primary listings and NYSE MKT Tape C symbols would resume trading at 3:10pm. Trading resumed as scheduled and the closing auctions accepted orders and executed normally. All NYSE and NYSE-MKT listed securities traded for the entire day either on NYSE and NYSE MKT or other market centers."