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A stock exchange run by Lenexa’s Bats briefly comes to a halt

Bats Global Markets bought Direct Edge Holdings earlier this year, adding two U.S. stock markets, including EDGX.
Bats Global Markets bought Direct Edge Holdings earlier this year, adding two U.S. stock markets, including EDGX. The Kansas City Star

A U.S. stock exchange run by Lenexa-based Bats Global Markets Inc. had a malfunction that prompted other trading platforms briefly to stop sending orders there.

The Direct Edge EDGX Exchange, which handled about 6.4 percent of U.S. equity volume last month, “experienced a brief hardware failure,” according to an e-mail from Bats. The error involved stocks listed by Intercontinental Exchange Inc.’s NYSE Group with ticker symbols ranging from GE to IJT. NYSE, Nasdaq OMX Group Inc. and other exchanges run by Bats temporarily stopped routing orders to EDGX.

The incident echoed what happened Wednesday at dark pools run by Goldman Sachs Group Inc., Credit Suisse Group AG and UBS AG, which for a while rebuffed orders from clients amid a deluge of volume in the stock market, according to five people familiar with the matter.

Competing exchanges started telling traders that EDGX was having a problem about 9:30 a.m. Central time, around the time the Standard & Poor’s 500 index started rebounding from its lows of the day amid a surge in volume spurred by comments from St. Louis Federal Reserve Bank president James Bullard.

Bats bought Direct Edge Holdings LLC earlier this year, adding two U.S. stock markets, including EDGX. Bats is replacing Direct Edge’s computer systems with its own. That shift is scheduled to take place in January, Bats spokesman Randy Williams said.

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