Exchange Playbooks On Outage Protocols In Equity Markets

Shanny Basar
Bats IPO Boosts Exchange Competition

The EU financial market infrastructure is generally robust, stable and resilient. This reliability of trading systems is underpinned by the continuous investments of trading venues and market participants in their infrastructure, ensuring orderly trading, providing investors with the best possible service, and complying with the applicable regulatory requirements.

While trading venue outages are rare, they require an appropriate response. All FESE members have procedures in place to do so. With the objective of a more harmonised framework in Europe that builds on the broad consensus in place, and to support market participants, FESE endorses the adoption of an industry-wide standard protocol to harmonise communication and outage procedures. The adoption of outage standard protocols would give the entire market and its participants the confidence, awareness and transparency needed in these exceptional, and incredibly rare, circumstances.

To contribute to this objective, FESE has agreed on ten principles for an industry-wide standard protocol in equity markets, published in January 2022, to which FESE members commit:

  1. Publishing individual playbooks including all principles listed hereafter. Playbooks shall be reviewed and updated on a regular basis.
  2. Publishing as close to real-time a market notice whenever an outage occurs.
  3. Updating their market status on a regular basis (even if the issues are not yet ascertained) and at least every 30 minutes, depending on the severity of the incident.
  4. Providing a minimum 30-minute notice before re-opening the market following an outage. For intensive checks of own orders, a minimum period of 30-minutes needs to be guaranteed.
  5. Ensuring a pre-opening phase (minimum length of 10min) prior to the resumption of trading.
  6. Offering an order book purge to every trading participant especially in cases where the integrity of orders has been compromised to a large degree.
  7. Considering trades for which an acknowledgement has been sent as valid (unless conducted under improper conditions).
  8. In the event of the closing auction being affected, the time for running the closing auction can be postponed until a certain point to be defined by the trading venue.
  9. In case the closing auction cannot take place for the trading session, the last traded price will be considered as the official closing price.
  10. Trading venues commit to run a post-mortem analysis and to explain the sequence of events and share conclusions and detailed mitigating procedures via appropriate communication channels like follow-up bilateral calls.

Since the publication of the principles, FESE members have been developing and publishing their playbooks on outage protocols. These playbooks act as a summary, focused primarily on incident communication, of relevant sections of the complete operational frameworks maintained by all exchanges.

Source: FESE

The table below serves as a centralised database of all the available playbooks.

Exchange Title Link Publication date
Athens Stock Exchange Playbooks on outage protocols No link (hard copy available) May 2022
Bulgarian Stock Exchange INTERNAL RULES Emergency Playbook – Incident Handling Standards and best practices defined by Bulgarian Stock Exchange Playbook April 2022
Cyprus Stock Exchange Playbooks on outage protocols No link (hard copy available) May 2022
Deutsche Börse Emergency Playbook Incident Handling Playbook October 2021
Euronext Euronext Playbook for incident management Playbook February 2022
Luxembourg Stock Exchange LuxSE Playbook for Incident Management Playbook May 2022
Prague Stock Exchange EMERGENCY PLAYBOOK PRAGUE STOCK EXCHANGE – Incident Management Guide Playbook May 2022
SIX Group BME BME’S EQUITY TRADING SYSTEMS INCIDENT HANDLING- Protocols and Standards Playbook May 2022
SIX Swiss Exchange Emergency and Outage Policy – A High Level Summary of Procedures on SIX Swiss Exchange Playbook November 2021
Vienna Stock Exchange Emergency Playbook – Incident management guide (version 1.0) Playbook April 2022

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