A five-minute halt in trading on Cisco Systems shares has highlighted a major flaw in the way the New York stock exchange works.
According to Bloomberg Businessweek, the company stopped trading for five minutes on Thursday after Amex executed an order for a 100 shares at a price which went against the best price offer.
The system glitch caused Cisco shares to instantly increase by 10 per cent, triggering a circuit breaker that had been installed after the market crash on 6 May.
According to a 2007 directive entitled 'Regulation National Market System', trade markets are advised not to trade in prices that are not in line with the best price offer or the price on any other market.
Giving a statement to Businessweek, Jamie Selway, the MD of brokerage firm White Cap Trading in New York, said: “Amex has a thin book in Cisco and doesn’t have a robust routing system for orders. Amex should consider a smart-routing solution and not do the minimum Reg NMS routing.”