Last week, NASDAQ was closed for ~3 hours due to a software/computer glitch. Within 24 hours of this incident, the NASDAQ OMX CEO came on the news explaining what happened. Various news outlets criticized the company for not coming out sooner and informing the general public. On the surface, this incident seems like just a technical glitch and a communication breakdown but there might be deeper issues. Here are some recommendations to address this:
- Role of NASDAQ OMX
- Create backup hot-sites on a different electrical grid
- Document and test offline scenarios so that markets and exchanges continue to function even if technology infrastructure is affected
- Have communications SOPs to timely inform the public
- Upgrade technology infrastructure
- Role of SEC
- Create policies and fines if something like this happens again
- Create systems that provide real-time monitoring of markets and exchanges
- Regulate the existence and maintenance of backup hot-sites
- Regulate the technology infrastructure to check for obsoleteness
- Role of Congress
- Increase the budget of the SEC to create systems that monitor markets and exchanges
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