BATs to Use Chicago Backup After Computer Issue Shuts BYX Venue

(Bloomberg) — Bats Global Markets Inc. said it will switch its BYX stock exchange to a backup system in Chicago after a computer malfunction forced the company to halt trading on the venue shortly after today’s open.

BATs, the Lenexa, Kansas-based company which is planning to merge with Direct Edge Holdings LLC to become the second-largest U.S. stock-exchange operator, announced its plans for “failing over” after an internal networking issue forced it to stop trading on the BYX venue at 9:44 a.m. New York time. That exchange accounted for 2 percent of daily U.S. stock volume in September, according to data compiled by Bats.

The switch — scheduled to begin at 12:40 p.m. New York time — will mark the first time the company has used the backup site in Chicago, spokesman Randy Williams said in an e-mail. Bats has previously used a backup site in Nutley, New Jersey, three times on a scheduled basis, he said.

The company advised customers to route orders away from the usual Bats Y servers and said its other venues weren’t affected.

Stock exchanges owned by NYSE Euronext and Nasdaq OMX Group Inc. were routing orders away from the venue before the halt. So-called “self help” was declared by NYSE Arca and Nasdaq shortly after the open of exchanges today, according to e-mails from the exchanges received by Bloomberg News at 9:38 a.m. in New York.

On Aug 6., Bats Z Exchange, the company’s largest U.S. stock exchange, was closed for 50 minutes because of a malfunction, also an internal network issue, Williams said at the time.