Over-the-Counter Stock Trading Halted in U.S. on Data Issue

November 8, 2013 Leave a comment

Over-the-Counter Stock Trading Halted in U.S. on Data Issue

Over-the-counter stock trading was halted for three-and-a-half hours today after a malfunction prompted regulators to shut the main venue. Trading of U.S. stocks that change hands on over-the-counter markets was stopped because of a “lack of current quotation information,” the Financial Industry Regulatory Authority said. OTC Markets Group Inc. resumed trading around 3 p.m. after a “network provider issue” was resolved, Chief Executive Officer Cromwell Coulson said in an e-mail. Equities such as Fannie Mae and Freddie Mac were paused, not companies listed by NYSE Euronext (NYX) or Nasdaq OMX Group Inc.“Our clients are affected in that they are unable to trade OTC securities,” Mark Turner, head of U.S. sales trading at New York-based Instinet Inc., said in an interview during the halt. “Obviously it’s not as large of an issue as it would be if it occurred on Nasdaq or NYSE, but problematic nonetheless.”

The shutdown happened on one of the biggest days for trading this year with the public debut of Twitter Inc. shares. While investors said they saw no impact on Twitter, their nerves were tested in the hours after the open as the venue for over-the-counter stocks closed and one NYSE data feed slowed.

OTC Markets, the New York-based company which hosts trading in over-the-counter stocks, began experiencing connectivity issues at 6 a.m., according to Saskia Sidenfaden, a company spokeswoman. The troubles affected quotes and trade messages, she said. The pause began at 11:25 a.m. New York time today, Finra said on its website.

Companies whose shares trade over the counter make up a small fraction of total American transactions. Yesterday, the value of trades was about $1 billion, compared with $227 billion for stocks listed on the NYSE or Nasdaq, according to data compiled by Bloomberg.

To contact the reporters on this story: Sam Mamudi in New York at smamudi@bloomberg.net; Lu Wang in New York at lwang8@bloomberg.net

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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