Late this morning, the NYSE shut down due to an IT malfunction. The SEC, FBI, the Treasury Department, and the White House have released statements indicating that this was not an act of cyber terrorism. All of the agencies continue to monitor the situation.
The glitch was solely due to an internal malfunction of the NYSE’s IT systems and resulted in a full halt of all trading on the exchange. The halt began at 11:32 a.m. EST and, according to sources, any open orders on the exchange will be cancelled. While this news seems quite problematic on the surface, for consumer investors, the NYSE shut down is a complete non-issue.
Over the past decade, additional trading platforms have come about. While some regulators have suggested that this “fragmentation” is problematic, today’s IT failure on the NYSE shows that it’s a great example of diversification in action. According to several analysts, had this event occurred even a mere decade ago, it would have resulted in a complete halting of all trading in the United States. Today, with so many exchanges available to investors and with those investments being routed digitally to the best possible location, trading has largely continued unaffected throughout the United States. In fact, the overwhelming majority of investors would be completely unaware of the NYSE shut down had the media not reported it.
There is a general concern about how consumers will view the situation with respect to the safety of their investments. No consumers appear to have lost any money as a result of the glitch on the NYSE. Most platforms, such as Fidelity Investments, T.D. Ameritrade, Scottrade, and others were completely unaffected. We view the events as extremely positive for consumers; namely, that this event is a successful demonstration of exactly how safe the act of modern investing is from a technical standpoint.
If you have any concerns regarding your investments and wish to discuss this situation or any other such issue with one of our qualified CPAs and financial experts, feel free to contact us at (904) 296-2024.