As Sandy sweeps across the East Coast, going electronic seems to make more sense than ever.
UPDATE: The original version of this article was based on a press release from NYSE stating that although the physical exchange would be shut, NYSE-listed securities would be traded on Arca. A subsequent press release and confirmation in a call from NYSE said that the markets would in fact be closed. The article has been updated accordingly.
Sometimes, I'm reminded that although London can be a gloomy, frigid and wet place at the best of times during winter, we never really get shafted by the weather that badly. Sure, it's been unseasonably cold over the last week or so, with temperatures reaching around 40 degrees one evening, but we never have to really deal with tornadoes, earthquakes, volcanoes, tidal waves or the convergence of several storms into one massive, ruin-your-day-style meteorological event.
Leave aside views on the demolition of open outcry for a moment; it's quite impressive that markets can continue to function without anyone being there.
This was highlighted to me not only by my New York-based better half last night, who insisted she has enough bottled water and tinned food to survive a nuclear apocalypse, should she be stuck inside for a few days, but also by the press release from NYSE noting that markets would be shuttered due to the event.
The release also points out that the last time physical operations were shut down was again due to a hurricane, Gloria, on 27 September 1985.
Given the electronic nature of modern markets, and indeed, the financial industry as a whole, business continuity plans in the absence of physical presence are well-established. Granted, an event such as a devastating terrorist or military attack, a freak natural catastrophe or other areas will always throw a wrench into established procedure, by their very nature, but for those that can be predicted, technology allows for contingent plans to be put in place. NYSE, for instance, has the ability to allow for the traded of NYSE-listed securities on Arca in the event of a market closure, which were tested earlier this year. Despite announcing this would be the case earlier, though, the severity of Sandy has apparently closed all markets completely.
For businesses, too, the Internet and cloud will bring continued benefits in the form of these contingencies. Our New York staff, for instance, who aren't in London shortly for the upcoming Buy-Side Technology Awards on Friday, will likely be working from home without much in the way of disruption.
Despite the marvels of technology, however, there is one area which will always throw things into chaos given half a chance. During that aforementioned telephone call last night, I mentioned that a few bonus days off work and law school was a nice side benefit of the hurricane.
"Sure," she replied. "As long as the power lasts."
Here in London and elsewhere, naturally, our thoughts are with our colleagues, friends, families and contacts in New York and the surrounding areas during this period. Stay safe.
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