Nasdaq experienced a network disruption Thursday at its Carteret, New Jersey facility that caused intermittent data gaps across its U.S. equity-market feeds, forcing customers to rely on backup infrastructure in Chicago.
The disruption affected multiple multicast groups and both hardware- and software-based feeds serving Nasdaq, Nasdaq Texas and Nasdaq PSX. Nasdaq confirmed that both its A and B feeds originating from Carteret were affected and advised customers to switch to Chicago feeds while the problem was investigated.
The incident is significant because modern equity markets depend on rapid and synchronized distribution of quotes, trades and other market information. Problems with primary market-data infrastructure can complicate pricing, execution and risk management even when the underlying trading systems continue operating.
Nasdaq’s trading operations were not disrupted, according to reporting on the incident, and the network problem was subsequently resolved. There was no evidence that the event was a cyberattack.
The use of Chicago backup feeds demonstrated the redundancy built into Nasdaq’s infrastructure, but the incident also highlights the dependence of U.S. markets on a relatively small number of critical data-distribution facilities.
For market participants, the key issue is whether Nasdaq identifies any broader infrastructure weakness following its investigation and whether regulators seek additional information about the disruption.
