Bats Global Markets Inc., the Lenexa-based electronic stock exchange, said its main stock exchange suffered a 50-minute outage Tuesday.
It was “the first outage of significance” the exchange has had since its March 2012 failed attempt to begin public trading of its own shares, Bats spokesman Randy Williams said in an email. He said other outages have not lasted more than a minute.
Williams said the problem had to do with an “internal network issue” rather than a software problem. Its 2012 problem grew out of a “software bug,” the company said at the time.
An alert on the company’s website shortly after noon noted an investigation of “system issues” on the larger of two electronic exchanges Bats operates.
About a minute later, Bats’ smaller exchange began to bypass its larger exchange that was suffering problems. Other exchanges, including the New York Stock Exchange, similarly bypassed the troubled Bats exchange to handle transactions.
A Bats alert posted shortly after 1 p. m. said the larger market had resumed normal operations.
The outage meant that Bats’ systems showed “stale” prices to buy or sell stocks, but Bats quickly canceled them so they wouldn’t disrupt other exchanges’ trading, said Eric Hunsader, chief executive of Nanex LLC, which provides real-time market data to traders.
“First time I’ve seen an exchange do that,” Hunsader said.
He gave Bats credit for handling the situation well, though he added that the outage shouldn’t have happened.
Bats customers, Hunsader said, likely had to move their orders to another exchange. His review of trading volumes Tuesday suggested most of the displaced Bats activity went to Nasdaq.
In 2012, Bats had hoped to make its own stock the first to use the Bats exchange as its home market. The debut was to kick off a campaign to compete with the New York Stock Exchange and Nasdaq for public company listings.
Problems, however, disrupted the launch and forced Bats to cancel the stock’s debut. Bats shares still have not begun to trade publicly.
Though embarrassing, the event did not damage the market’s business. Bats’ exchanges continue to handle more than 10 percent of the daily trading volume in U.S. stocks, making it the third largest exchange behind the New York and the Nasdaq Stock Market.