Good Job MlpReport.com
Our millions of followers here at MlpReport.com will remember that back in November 2012 we reported that New York Stock Exchange stakeholders should be outraged over the NYSE shutting down due to hurricane Sandy. As we reported correctly (Ya for Us), the vast majority of trading occurs electronically, and a financial services firm such as the NYX should have the back up plans in place to not interpret operations.
This past weekend Rueters reported that NYX has filed a plan with the SEC:
“NYSE Euronext is preparing to submit details of the plan to the U.S. Securities and Exchange Commission, according to the report, which cited people involved in the preparations. If activated, the plan would represent the first time the 221-year-old exchange would rely entirely on computer systems, without the oversight of floor-based traders, the paper said. A NYSE spokesman declined to comment on the report.
The disaster plan would shift trading entirely to Arca, NYSE’s all-electronic sister market. It would replace NYSE’s current backup plan that calls for the exchange to remain open in a limited capacity while sending orders to Arca to be filled.”
We don’t always nail it like we did with this Corporate Governance item, but when we do we felt it necessary to point it out to our readers. As we attempt to remain humble here in the newsroom, we remind ourselves “it’s better to be lucky then good.”
Super hurricane Sandy wiped out most of the tri-state area last week. Causing billions of dollars in damages and crippling business. Whenever storms such as Sandy appear institutions rush to implement their Disaster Recovery Programs, or Business Continuity Plans (BCP). The NYSE Euronext may have to dust off their BCP plan to be more prepared for the next Sandy. Wikipedia defines a BCP as:
“identifies an organization’s exposure to internal and external threats and synthesizes hard and soft assets to provide effective prevention and recovery for the organization, while maintaining competitive advantage and value system integrity”
In this age of technology and redundancy planning shouldn’t the NYSE have plans in place to operate at another location? If the NYSE completes 1 billion trades a day and they earn $.01 per trade that costs shareholders $10 million per day in lost revenue. I understand that traders and other market makers need to be present for the exchange to function properly, but somewhere along the line the BCP failed for NYSE. Why not pull all “critical personnel” out to Chicago a week prior to the storm?
I understand this storm was devastating, but $NYX board members should be asking some tough questions to management.