Incident: London Stock Exchange Faces Major Trading Delay Due to Software Glitch

Published Date: 2019-08-16

Postmortem Analysis
Timeline 1. The software failure incident happened on a Friday, as mentioned in both articles [88287, 88159]. 2. Article 88287 was published on 2019-08-16. 3. Therefore, the software failure incident occurred on Friday, August 16, 2019.
System 1. Technical software issue at the London Stock Exchange [Article 88287, Article 88159]
Responsible Organization 1. The London Stock Exchange experienced a technical software issue that caused the software failure incident [Article 88287, Article 88159].
Impacted Organization 1. London Stock Exchange 2. Traders of UK's largest companies such as Shell, Unilever, HSBC, and BHP Group 3. Investors 4. Market participants 5. LSE shares listed on the FTSE 100 6. City workers 7. LSE and its chief executive, David Schwimmer 8. Refinitiv 9. Financial data and news provider Refinitiv 10. Thomson Reuters [Cited Articles: 88287, 88159]
Software Causes 1. The software failure incident at the London Stock Exchange was caused by a "technical software issue" [Article 88287]. 2. The exact nature of the software glitch that led to the outage was not disclosed, but it was confirmed to be a "technical software issue" [Article 88159].
Non-software Causes 1. The outage was exacerbated by worries about a U.S. recession and the U.S.-China trade spat, leading to a hectic week on global financial markets [88287]. 2. A large number of market participants were away on holiday, potentially limiting the impact of the failure [88287]. 3. The failure incident occurred at a time when the FTSE 100 had plunged to a six-month low due to recession fears sweeping the world's stock markets [88159]. 4. The outage occurred during a period of turmoil for the markets, driven by recession fears [88159].
Impacts 1. The software failure incident caused a delay in the start of trading on the UK blue chip FTSE 100 and midcap stock indexes for almost two hours, which was the longest outage at the London Stock Exchange in eight years [88287, 88159]. 2. The fault affected hundreds of shares in some of the UK's largest companies, including Shell, Unilever, HSBC, and BHP Group, worth a total of $2.8 trillion [88287]. 3. Traders were frustrated by the outage, especially during a hectic week on global financial markets, which were already impacted by worries about a U.S. recession and the U.S.-China trade spat [88287]. 4. The outage was a major embarrassment for the London Stock Exchange amid stiffening competition, rising costs, and greater regulation among exchange operators [88287]. 5. The incident raised questions about the reliability of the LSE as one of the most reliable stock exchanges in Europe [88159].
Preventions 1. Implementing more robust testing procedures to catch software glitches before they impact trading, such as thorough regression testing and stress testing [88287, 88159]. 2. Investing in better redundancy and failover systems to ensure continuity of trading operations in case of a software failure [88287]. 3. Conducting regular audits and reviews of the software systems to identify and address potential vulnerabilities or weaknesses that could lead to outages [88159]. 4. Enhancing cybersecurity measures to protect against potential cyber-attacks that could disrupt trading operations [88159]. 5. Improving communication and transparency with stakeholders about the technical issues and steps being taken to resolve them in a timely manner [88287, 88159].
Fixes 1. Implementing more robust testing procedures to catch software glitches before they impact trading [88287, 88159]. 2. Conducting a thorough investigation to identify the root cause of the technical software issue and implementing measures to prevent similar incidents in the future [88287, 88159]. 3. Enhancing cybersecurity measures to protect against potential cyber-attacks that could disrupt trading operations [88159]. 4. Investing in upgrading and maintaining the software infrastructure to ensure reliability and stability [88159]. 5. Increasing redundancy and backup systems to minimize downtime in case of software failures [88159].
References 1. London Stock Exchange spokeswoman via email [Article 88287] 2. London Stock Exchange website statement [Article 88287] 3. LSE spokesman [Article 88159] 4. Neil Wilson of Markets.com [Article 88159] 5. Traders interviewed by Reuters [Article 88159] 6. Fiona Cincotta, senior market analyst at City Index [Article 88159]

Software Taxonomy of Faults

Category Option Rationale
Recurring one_organization (a) The software failure incident having happened again at one_organization: The London Stock Exchange (LSE) experienced a software glitch that caused a delay in trading, marking the second outage at the LSE in just over a year [88287]. The LSE had a previous outage in June 2018 due to a technical fault during the opening auction [88287]. (b) The software failure incident having happened again at multiple_organization: There is no specific mention in the articles about similar incidents happening at other organizations.
Phase (Design/Operation) design (a) The software failure incident at the London Stock Exchange was attributed to a "technical software issue" that caused a delay in the start of trading on the UK blue chip FTSE 100 and midcap stock indexes [88287, 88159]. This delay was the result of a glitch that struck the London Stock Exchange's systems, preventing investors from buying or selling shares for over an hour and a half [88159]. The outage was described as the longest at the LSE in eight years and was linked to a software fault that the exchange was still investigating [88287]. The incident was not caused by a cyber-attack but rather by a technical issue within the software systems [88159]. (b) The software failure incident affected trading on the London Stock Exchange, leaving City workers unable to conduct transactions until the issue was resolved [88159]. The outage occurred during a turbulent week in global financial markets, adding to the frustration of investors already concerned about recession fears and the U.S.-China trade tensions [88287]. The delay in trading was a significant disruption for market participants, especially considering the high volume of trading handled by the LSE on a daily basis [88287]. The incident raised questions about the reliability of the LSE's technology and its ability to maintain smooth operations, particularly in light of the exchange's recent acquisition deals and ambitions to become a global financial infrastructure leader [88159].
Boundary (Internal/External) within_system From the provided articles, the software failure incident at the London Stock Exchange was attributed to a "technical software issue" [Article 88287]. The outage was caused by a "software glitch" [Article 88159]. These descriptions indicate that the boundary of the software failure incident was within the system, as the issues originated internally within the software systems of the London Stock Exchange.
Nature (Human/Non-human) non-human_actions (a) The software failure incident at the London Stock Exchange was attributed to a "technical software issue" [88287]. The outage was described as a "software glitch" that prevented trading in the shares of Britain’s biggest companies [88159]. The exchange confirmed that the outage was caused by a "technical software issue" and not a cyber-attack [88159]. (b) The article mentioned that the outage was the result of a "technical software issue" [88287]. Additionally, the LSE declined to reveal the exact cause of the failure but attributed it to "a technical software issue" [88159]. The incident was described as a "software glitch" that left investors unable to buy or sell shares for more than an hour and a half [88159].
Dimension (Hardware/Software) software (a) The software failure incident at the London Stock Exchange was attributed to a "technical software issue" [Article 88287]. The outage was caused by a software glitch that prevented trading in the shares of Britain’s biggest companies [Article 88159]. The exchange confirmed that the outage was due to a "technical software issue" and not a cyber-attack [Article 88159]. (b) The software failure incident was specifically mentioned to be caused by a "technical software issue" [Article 88287]. The London Stock Exchange experienced a systems failure due to a software glitch, which led to the disruption in trading [Article 88159]. The exchange declined to reveal the exact nature of the issue but attributed it to a "technical software issue" [Article 88159].
Objective (Malicious/Non-malicious) non-malicious (a) The articles do not mention any indication of a malicious software failure incident. There is no mention of a cyber-attack or any intentional harm caused by human actors in the software failure incident reported in the news articles [88287, 88159]. (b) The software failure incident at the London Stock Exchange was described as a "technical glitch" and a "technical software issue" that led to the delay in trading on the UK blue chip FTSE 100 and midcap stock indexes. The outage was attributed to a non-malicious software failure, with the exchange confirming it was a "technical software issue" and not a cyber-attack [88287, 88159].
Intent (Poor/Accidental Decisions) accidental_decisions (a) The articles do not provide specific information indicating that the software failure incident was due to poor decisions. However, they mention that the outage was caused by a "technical software issue" and a "software glitch" [88287, 88159]. (b) The articles suggest that the software failure incident was due to accidental decisions or mistakes rather than poor decisions. The outage was described as a "software glitch" and a "technical software issue," indicating an unintended technical problem rather than a deliberate poor decision [88287, 88159].
Capability (Incompetence/Accidental) development_incompetence (a) The software failure incident at the London Stock Exchange was attributed to a "technical software issue" [Article 88287]. The outage was described as a "software glitch" [Article 88159]. These terms suggest that the failure may have occurred due to contributing factors introduced by development incompetence or lack of professional competence by humans or the development organization. (b) The articles did not specifically mention that the software failure incident was accidental.
Duration temporary (a) The software failure incident reported in the news articles was temporary. The incident caused a delay in the start of trading on the UK blue chip FTSE 100 and midcap stock indexes for almost two hours [88287]. The outage was the longest at the London Stock Exchange in eight years, and trading was disrupted for more than an hour and a half [88159]. The technical glitch was described as a "technical software issue" that postponed the opening of trading until it was resolved [88287]. The systems were brought back online, and trading resumed after the issue was resolved [88159].
Behaviour crash, omission, timing (a) crash: The software failure incident in the London Stock Exchange caused a delay in the start of trading for almost two hours, which is the longest outage at the exchange in eight years. Traders were unable to buy or sell shares during this time, indicating a crash in the system where it lost its state and did not perform its intended functions [88287, 88159]. (b) omission: The software glitch prevented trading in the shares of Britain's biggest companies, including those in the FTSE 100 and FTSE 250 indexes. Investors were left unable to buy or sell shares for more than an hour and a half, indicating an omission in the system's performance of its intended functions [88159]. (c) timing: The delay in the start of trading until 0840 GMT, instead of the normal opening time of 0700 GMT, suggests a timing issue where the system performed its intended functions but at the wrong time [88287]. (d) value: There is no specific mention of the system performing its intended functions incorrectly, leading to a value-related failure in the articles. (e) byzantine: There is no indication in the articles that the system behaved erroneously with inconsistent responses and interactions, suggesting that a byzantine behavior was not observed in this software failure incident. (f) other: The articles do not provide information on any other specific behavior of the software failure incident beyond the options mentioned above.

IoT System Layer

Layer Option Rationale
Perception None None
Communication None None
Application None None

Other Details

Category Option Rationale
Consequence delay (a) death: People lost their lives due to the software failure (b) harm: People were physically harmed due to the software failure (c) basic: People's access to food or shelter was impacted because of the software failure (d) property: People's material goods, money, or data was impacted due to the software failure (e) delay: People had to postpone an activity due to the software failure (f) non-human: Non-human entities were impacted due to the software failure (g) no_consequence: There were no real observed consequences of the software failure (h) theoretical_consequence: There were potential consequences discussed of the software failure that did not occur (i) other: Was there consequence(s) of the software failure not described in the (a to h) options? What is the other consequence(s)? The articles do not mention any direct consequences such as death, harm, impact on basic needs, or harm to non-human entities due to the software failure incident at the London Stock Exchange. The main consequence highlighted in the articles is the delay in trading activities, impacting investors and causing frustration [88287, 88159].
Domain finance (a) The failed system was related to the finance industry as it impacted the London Stock Exchange, which is a major financial market handling billions of pounds worth of volume each day [88287, 88159]. (h) The software failure incident was specifically related to the finance industry as it affected trading on the UK blue chip FTSE 100 and midcap stock indexes, causing delays in the opening of trading and impacting shares of major companies like Shell, Unilever, HSBC, and BHP Group [88287, 88159].

Sources

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