

Bats All, Folks The Epic Fail of the Worst IPO Ever - brisance
http://www.businessweek.com/articles/2012-03-23/bats-all-folks-the-epic-fail-of-the-worst-ipo-ever

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brisance
Press release from BATS:

Dear Member,

At 10:45:26AM ET, a single matching engine handling symbol range A-BFZZZ
encountered a software bug related to IPO auctions which rendered open orders
in this symbol range inaccessible. BZX Exchange sent notice at 10:48:41AM ET
that BATS staff was investigating system issues in trading of symbols in the
range of A through BFZZZ. Additionally, the IPO auction for securities of BATS
Global Markets, Inc. ("BGM") did not successfully print and continuous book
trading of BGM stock on the BZX Exchange system did not begin as expected.

BATS immediately requested all quotes in the affected range for BZX Exchange
be removed from the consolidated tapes. Around 11AM ET, the BATS Trade Desk
noticed BYX Exchange was continuing to witness crossed markets from stale
quotes in UTP symbols on the BZX Exchange. BYX Exchange declared Self Help vs.
BZX Exchange at 11:07:04am ET and again contacted the UTP SIP to pull quoting
for symbols in the affected range. BATS confirmed the UTP SIP successfully
pulled BZX Exchange quotes at 11:27:01am ET. The stale BZX quotes seen in BYX
were the cause of three clearly erroneous trades in AAPL which were cancelled
between 11:49am and 12:34pm ET.

Regarding the initial print of BGM stock, BZX Exchange submitted the IPO
auction print to the consolidated tape at 11:14:18am ET.

Prior to noon ET, BATS staff notified members that the system would be
available for trading all securities in the affected range except for BGM at
noon ET. In connection with attempting an orderly reopening of the BGM stock,
BATS staff communicated to members that it would shutdown trading for an
emergency window period between12:40-12:50PM ET in order to deploy an
emergency patch. BZX Exchange cancelled all open orders in this symbol range
prior to the orderly shutdown and during this period deployed the emergency
patch. The shutdown and commencement of trading in this symbol range was
orderly and occurred at the communicated timeframes. BATS staff ultimately
made a decision not to reopen the BGM stock. Once the decision was made, the
original IPO print was cancelled, individual executions were broken for the
day, and notice was submitted to all affected parties.

BATS expects all systems to operate normally on Monday morning and the BGM
stock (symbol BATS) will not be trading.

BATS Trade Desk 913.815.7001 tradedesk@batstrading.com
www.batstrading.com/alerts www.batsoptions.com/alerts

