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The BBC's Sarah Pennells
"It has not been a good week for the London Stock Exchange"
 real 28k

Brian Wheatley, London Stock Exchange
"We had a minor glitch"
 real 28k

Jim Norton, e-Business, Institute of Directors
"Assume it it going to fail... and redesign it"
 real 28k

Thursday, 6 April, 2000, 14:44 GMT 15:44 UK
London market opens smoothly
Gavin Casey, London Stock Exchange chief
Exchange boss Gavin Casey: "No fiasco".
Share traders heaved a sigh of relief on Thursday morning as the London Stock Exchange opened for business without a hitch.

Nerves were fraught in City trading rooms before the start (0700 GMT) after Wednesday's computer problems prevented trading for eight hours.

Wednesday was the first time New York opened before London.

City share dealer

The City watchdog, the Financial Services Authority (FSA), is investigating the system failure, which cost brokers millions of pounds in lost business and damaged the reputation of London as a major world share dealing centre.

The exchange says its technicians have traced the fault to an error between two computer systems which caused share prices to be issued before they had been updated.

This meant that inaccurate prices were transmitted to City dealers, making it impossible for them to buy and sell the shares they wanted.

Bad data

The exchange says its back-up system was also corrupted by the computer failure, and the only solution had been to turn the system off and reset it from scratch.

Trading had been all the more vital on Wednesday as it was the last day of the UK tax year.

Angela Knight from the Association of Private Client Investment Managers said thousands of private investors had lost the chance to adjust their portfolios to save on capital gains tax.

The FSA said it was "a serious matter that requires a prompt and thorough response.

"Lessons need to be learned rapidly and made public."

Chaos on Wednesday

Trading in UK stocks did not begin until 1545 (1445 GMT), amid highly strung market conditions following the dramatic swings of 15% seen on the American indices on Tuesday.

Such was the impact of the computer fault that UK government ministers discussed delaying the end of the tax year to enable the completion of the vast amount of business which was due to take place.

But in the end the Treasury decided against it.
Woman leaving City late
It was a late finish for many City workers

The FSA said it would work with the London exchange to examine what changes and back-up arrangements were needed to avoid a repeat of the debacle.

Stock exchange chief Gavin Casey told the BBC that the problems should not be described as "a fiasco".

Instead it was a "very considerable disappointment which we regret greatly".

That was not how traders and investors had described it as they waited eight hours to start trading.

Once the fault was finally fixed, the FTSE 100 index of leading shares fell some 120 points to 6,307 - its lowest point for more than two months.

But with London trading extended to 2000 UK time (1900 GMT) for the first time in living memory, the FTSE 100 recovered to end 47.7 points lower at 6,379.3.

Although that figure was calculated at 1730 GMT, stockbrokers were able to continue buying and selling shares until the later time to try to catch up with the vast backlog of trades.


The latest problems came only two days after the FTSE 100 index was unavailable for four hours on Monday.

Elsewhere in Europe, stock markets suffered some steep falls.

Trading in Frankfurt and Paris was volatile, but on both markets the key indices were down by more than 2.5%.

American stock markets appeared calmer after the excitement of Tuesday, with the Dow Jones industrial average down just over 1% at the close and the technology weighted Nasdaq index up more than 2%.

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