Reuters’ system failure disrupts FX trading

The outage took place at 0120 GMT (0220 UK time) and lasted an hour before fully recovering by 0320 GMT, said a spokesperson for Reuters in London. He said trading in sterling, Australian and New Zealand dollars were affected.

“A lot of our feeds for our internal systems come direct from Reuters, so there were some ongoing implications,” said a Singapore-based trader. He said volumes naturally migrated to rival broker EBS as a result.

One head of trading added: “Both Reuters and EBS as the primary sources of liquidity know that at any time they go down, the liquidity switches immediately to the other one, so they are losing from the second the system fails.”

The Reuters spokesperson said the outage is being investigated by the company, with no further problems having occurred since.

What is known is that the outage did not arise from a power failure, as was the case in October 2004 (FX Week, October 18, 2004). In that case, a power outage at Reuters’ technical centre caused massive disruption to FX traders, who were left without pricing in European currencies for seven hours.

That outage hit real-time data from the vendor’s dealing platforms, meaning the data from trades on Reuters Dealing and the EBS spot FX platform did not feed through to Reuters’ datafeed.

This latest incident, however, highlighted the need to remain vigilant. Over the course of this year a number of platforms have touted their intentions of capturing a piece of the interbank business. In April, Citigroup subsidiary, Lava Trading, confirmed plans to launch a new interbank forex trading system this year (FX Week, May 1). Meanwhile another company rumoured to be working on an interbank platform is eSpeed, which is believed to be in the process of signing on banks in support of its venture. eSpeed declined to comment.

Saima Farooqi