Investors blocked from trading as markets seize up

​Investors are unable to trade electronically across the industry as markets have seized following a surge in trading after the UK voted to leave the EU.

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Jun 24, 2016

Investors are unable to trade electronically across the industry as markets have seized following a surge in trading after the UK voted to leave the EU.

A number of platforms are unable to process investor requests to trade, as they are not receiving prices from market makers, Money Marketing sister publication Fund Strategy understands. The surge in trading has occurred after 52 per cent of the UK public voted to leave in the EU referendum.

Hargreaves Lansdown, AJ Bell and TD Direct are among those affected, with market makers and brokers unable to cope with the volume of requests for trades.

AJ Bell spokesman Charlie Musson says the platform has seen a five-fold increase in trading this morning compared to a typical day, causing problems with trades.

He says: “Initially the market makers weren’t serving back any electronic quotes, so we couldn’t trade electronically and I think that is widespread across the market."

Hargreaves Lansdown head of financial planning Danny Cox says the platform is also experiencing problems and delays, but says it is an “industry-wide issue”, adding: “We can’t get prices through from the markets,so it is delaying trades.”

He adds that not every fund is experiencing delays, and did not have details of the trades being hardest hit by the problems.

Axa Self Investor head of investing Adrian Lowcock says technology across the industry is not prepared for peaks in trading such as this.

“This morning’s results has created a lot of activity as investors look to protect themselves or profit from falls in the market. With some stocks falling more than 20 per cent the markets are suffering and many brokers are struggling to cope with demand.

“Frustrating as this is for investors these are exceptional circumstances and things are likely to settle down in matter of days. However this seems to be an increasingly common occurrence in recent years and the IT systems across the industry have not been adapted to accommodate peaks in demand.”

Musson adds that clients can place limit orders, which sets the limit of the price they will buy or sell at, meaning that “when the market calms down and there is a bit more liquidity” the trades can happen.

Cox adds: “Shares go to auction and they will reset that auction every five minutes to make sure we get fair value for the trades we’re making. They will keep doing that until the market normalises. As soon as we start to get prices we will trade.”

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