New York - Nasdaq OMX chief executive Robert Greifeld on Friday pointed to problems at a party to the exchange's network as the cause for the three-hour shutdown of trade on Thursday.
Greifeld also told CNBC television in an interview that the decision to shut the Nasdaq Stock Market was made to ensure that long-term traders were not left at a disadvantage to professionals in the market.
He insisted that the exchange acted properly, but that it needed to work more “defensively” to avoid such interruptions in the future.
Greifeld did not identify the specific cause of the problem, which interrupted trade in equities and options shortly after noon. Trading was only restarted more than three hours later, at 3:25 pm local time (1925 GMT), 35 minutes before the market closed.
But he pointed to a party to the Nasdaq market data-sharing system as the source.
“We have 13 different exchanges, we have hundreds of market participants, we are all interconnected in a number of fundamental ways,” he said.
“We all have to be aware of the other person not acting always in the proper way, and you have to have your system be able to handle defensive driving.”
Greifeld said that when the problem surfaced, Nasdaq management was quickly aware the there was a difference between the trading information being received by professional traders and individual, traditional long investors.
The exchange halted trade as soon it was aware of the differences in what information got to people.
“Nobody was relatively advantaged or disadvantaged,” he said.
He said Nasdaq's systems have a record of being up “99.9-something percent” of the time.
“We're deeply disappointed with what happened yesterday. We aspire for perfection. We want to get to 100 percent up-time.”
“There will always be issues within the ecosystem,” he added.
“Where we have to get better is what I call defensive driving.”