NYSE to open up facilities for testing ahead of Twitter IPO

Fri Oct 18, 2013 6:48pm EDT
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By John McCrank

NEW YORK (Reuters) - NYSE Euronext said on Friday it would offer testing next weekend for trading firms planning to take part in Twitter's market debut, highlighting an industry-wide focus on risk controls after a spate of technology-related snafus in recent years.

The initial public offering of microblogging site Twitter is the most highly anticipated since Facebook's IPO last year, when software problems at Nasdaq OMX Group resulted in a chain of events that market making firms said cost them a combined $500 million.

Before Twitter disclosed on Tuesday it would list on the New York Stock Exchange, analysts had said the Facebook IPO problems would likely weigh against Nasdaq's chances of winning the listing and the prestige that comes with it.

A date for the IPO has not yet been disclosed, but it is expected before the end of November.

NYSE said in the note to traders on Friday that in preparation for Twitter's market debut, firms could test their trading algorithms on October 26, when it would make available all of its production customer gateway connections for order flow.

The Big Board operator said additional details would be provided early next week, including registration details.

The Facebook incident was one of a number of high-profile technology-related problems that have roiled markets and weighed on investor confidence in recent years, placing a bigger focus on operational risk by regulators and market participants.

Nasdaq agreed to pay a $10 million penalty for the Facebook errors, the largest amount ever levied against a stock exchange, and also voluntarily said it would pay up to $62 million to compensate firms harmed in the May 18, 2012, market debut.   Continued...

The shadows of people holding mobile phones are cast onto a backdrop projected with the Twitter logo in this illustration picture taken in Warsaw September 27, 2013. REUTERS/Kacper Pempel