FSA response to difficulties at the London Stock Exchange

The FSA sees the failure of major trading systems to open as a serious matter that requires a prompt and thorough response. The FSA will work with the LSE, which it supervises as a recognised investment exchange, to ensure that the lessons from the failure to open are learned rapidly and made public, and that any necessary changes to its systems and back-up arrangements are made immediately During the day, the FSA has been working closely with the LSE and market participants to ensure that investor interests are safeguarded as far as possible. The FSA also offered guidance to retail brokers on handling customer orders. Brokers were asked to put messages on their phone systems and websites:

• alerting customers to the problem;

• telling customers that their orders would be executed as soon as practicable after the market re-opened;

• and warning customers that prices could be volatile in the early hours of trading after re-opening. The FSA found that most brokers were not taking orders from customers because of these problems.

The FSA itself alerted investors to the problem on its own website and installed a link to the LSEs website so that investors could see the latest news there as it was posted.

The FSA will continue to monitor the situation carefully.

Notes for editors

1. The FSA is the independent body established by parliament to regulate the financial services industry and protect consumers.