On Monday, June 3rd, a major technical failure occurred at the New York Stock Exchange (NYSE), resulting in multiple stocks being briefly suspended, including one of the highest-priced stocks on the market - Berkshire Hathaway's Class A shares. In terms of product structure, 10-30 billion yuan of products generated revenues of 401/1288/60 million yuan respectively.

Event review On Monday morning, due to a failure of the "CTA SIP" system to process stock price range information, many stocks on the New York Stock Exchange displayed abnormal prices, forcing trading to be suspended. Berkshire Hathaway's Class A share price briefly dropped to $185.10 during the chaos, a decline of 99.97%, although the stock quickly recovered to normal levels and eventually closed at around $700,000. In addition, several other stocks such as Barrick Gold Corporation and Nusscalar Power Corporation also experienced abnormalities of price drop.

This is not the first failure on Wall Street recently. The Standard & Poor's Dow Jones Indices recently announced that a problem during Thursday morning's trading caused a real-time price release of its widely watched S&P 500 index to be delayed for more than an hour.

The industry has just begun to switch to the new system, and the speed of stock trading settlement is much faster than before. Now, most stock trades need to be settled within one working day after the transaction is completed, rather than the two days previously required.

(Source：Wall Street News)

This event did not significantly affect major market indicators, but obviously caused short-term impact on investor confidence.

"This change was recommended by the U.S. Securities and Exchange Commission because the Fad stock craze at the beginning of 2021 put enormous pressure on the market, ultimately leading some brokers to limit purchases of GameStop and other stocks," said Gavino Roche Jr., co-founder of Saphyre.

"This incident coincides with the sensitive period of the global trading settlement rules transitioning from T+2 to T+1. The new rules require transactions to be settled on the first working day after completion, which puts higher demands on the operational efficiency of the exchange's backend." Industry observers pointed out that this technical failure emphasizes the need for modern and automated trading systems in such a fast settlement environment.

"Institutions are facing challenges to adapt to the T+1 settlement rule, and financial institutions should consider adopting a T+0 operating model to remain fully compliant," said Gabino Roche Jr., co-founder of Saphyre. He also pointed out that many large institutions have begun to increase their human resources to adapt to the new standard of completing transactions within 24 hours.

"Sensitive period. This incident coincides with the sensitive period of the global trading settlement rules transitioning from T+2 to T+1. The new rules require transactions to be settled on the first working day after completion, which puts higher demands on the operational efficiency of the exchange's backend."

"This incident did not significantly affect major market indicators, but obviously caused short-term impact on investor confidence."

"This is not the first failure on Wall Street recently. The Standard & Poor's Dow Jones Indices recently announced that a problem during Thursday morning's trading caused a real-time price release of its widely watched S&P 500 index to be delayed for more than an hour."

Also on Monday, GameStop shares surged more than 70% before the market opened, as "Roaring Kitty" Keith Gill returned to Reddit to bet $116 million on the troubled video game retailer.

(Source: Google)

"The U.S. Securities and Exchange Commission (SEC) and other regulatory agencies are concerned about this incident and may conduct a deeper examination of NYSE's operations and crisis management mechanisms. Market analysts expect that such technical failures may prompt regulatory agencies to strengthen their supervision and requirements for exchange technology infrastructure."

NYSE said it has fixed the problem and is committed to improving the stability and risk resistance of the system. However, market observers are still concerned that similar technical problems may occur in the future, especially when trading volumes surge.

"Although the NYSE quickly resolved this incident and resumed stock trading, this incident reminds us that even the world's largest and most advanced stock exchanges are not immune to technical issues. Continuous technological upgrades and innovation are key to avoiding a recurrence of such incidents for future market safety and efficiency, while global financial markets are pushing for automation and intelligence."

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