Operators of exchanges in the US are poised to upgrade the IT infrastructure following an embarrassing outage of the SIP or securities information processors inside Nasdaq this August. The Wall Street Journal reports that the SIP will receive a new operating system, which currently is based on Windows 2003, an OS that is a decade old and may be prone to hackers.
Although the Journal reports that people familiar with the IT infrastructure do not blame the old OS for the August outage – which lasted more than three hours – they do concede that the systems has been “neglected.”
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“This is a part of the industry that has not been paid of a lot of attention, even by insiders, for years,” said William O’Brien, chief executive officer of DirectEdge Holdings told the Journal. “Going forward, we’re called to do better. Improving the governance and transparency of how the SIP operates is going to be pivotal.” DirectEdge is among the 13 exchanges that sit on committees overseeing the SIPs.
“Designed to avoid another large-scale breakdown, the plan would establish faster backups for a key part of the market’s plumbing known as securities information processors, or SIPs, which consolidate the quote and trade data from exchanges before it is displayed to the public,” reports the Journal.
Computerworld UK writes: “It is not the first time that Nasdaq has received criticism for its use of outdated operating systems. In 2011 an FBI investigation into a security breach reportedly revealed that the exchange was an easy target as servers were still running on Windows 2003, and had not had security patches installed.
Jeffrey Wallis, managing partner of SunGard Consulting Services, told the Journal that the SIPs are a “highly regulated monopoly…that’s why there has been very little innovation in the technical framework around SIPs for the last 10 years.”
Stay tuned for details as they emerge.
