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from:
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Click Here: <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin
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Digital Society


Computer Glitch Shuts Down London Stock Trading


Funny thing, it was also the last day of the tax year.

LONDON'S reputation as a world financial centre was seriously damaged
yesterday when a computer glitch paralysed the Stock Exchange for more than
seven hours on what should have been one of its busiest days of the year.

The shutdown, which deprived City stockbrokers of tens of millions of pounds
in transaction fees, was serious enough to trigger an immediate investigation
by the Financial Services Authority.
Ministers also considered extending the 1999-2000 tax year to compensate
private investors who missed out on billions of pounds of tax savings by
selling or buying on the last day of the tax year.

However, as the Stock Exchange hobbled back to life at 3.45pm and the trading
day was extended to 8pm, the Treasury and the Inland Revenue issued
statements refusing investors any concessions.

The failure, which followed a shorter breakdown on Monday, forced
stockbrokers and investors to sit on the sidelines after the previous
evening's record trading on Wall Street. Tuesday had witnessed wild swings on
the New York Stock Exchange and the Nasdaq technology share market.

Stockbrokers were furious with the breakdown, the first serious stock market
hitch since that caused by the storm of 1987. On an average day, 1.5 billion
shares are traded. yesterday only 878 million changed hands. Ian Martin,
co-head of trading at HSBC, the UK's biggest bank, said the breakdown could
not have come at a worst time. "This is a key day in the tax year for private
investors."

Under normal circumstances, thousands of investors would have traded some of
their stocks at the last minute to use up their annual capital gains tax
allowance and offset any losses against previous gains. But the debacle did
not prevent hundreds of million of pounds flowing into Isas.
The London Stock Exchange said it had been crippled by a software problem
which corrupted share price information sent to professional traders before
the market opened. Martin Wheatley, an Exchange director, said the decision
was taken to shut down the market, which trades electronically, rather than
allow dealing to begin on incorrect share price information.
The FTSE 100 index closed 47.7 points weaker at 6379.3.
The London Times, April 6, 2000
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