The FIA Market Technology Division played a key role in helping the industry prepare for the leap second event on June 30, gathering information from exchanges around the world and providing guidance to members and the markets as a whole.
A leap second is the addition of an extra second at the end of a day to realign global time standards with mean solar time. During the 2012 leap second event, computer systems in several industries encountered issues based on differences in preparedness and implementation, mainly because most computer systems are not prepared to handle a timestamp of 23:59:60 and there are differences in how systems avoid using that timestamp.
Leading up to the 2015 leap second event, there was concern within the financial industry that similar issues could lead to a disruption to trading operations across exchanges, clearinghouses, brokers, investors and key service providers. This year’s event was the first time that a leap second event occurred during active trading hours in an environment where electronic and automated trading relies on sub-second precision for communication, execution, clearing, surveillance and audit trails.
The division published a set of recommendations to help the industry prepare for the upcoming leap second event and reduce the likelihood of market disruption. The recommendations were drafted by a working group of member firms, exchanges and vendors and focused on encouraging each firm to understand its environment and review key areas in order to anticipate the impact of the leap second. The recommendations covered five areas: develop and implement a continuity and recovery plan, implement enterprise time management, update vulnerable systems, actively monitor critical systems and consider adjusting market activity.
