Nasdaq's second error of day hobbled service dark pools rely on

[NEW YORK] A Nasdaq OMX Group service that some dark pools need in order to function broke down twice on Tuesday, hobbling part of the US stock market.

The first outage in the Nasdaq TRF lasted from the start of trading at 9:30 am through 9:42 am New York time, according to spokesman Joseph Christinat. The exchange said at 12:57 pm that it was again experiencing a problem.

Systems like the Nasdaq TRF help knit together US stock trading, which is distributed across more than 50 markets. Roughly a third of volume takes place off the public exchanges, on venues like dark pools that do business in secret up until the point a trade is completed. Dark pools then have to report transactions to services like the Nasdaq TRF.

Any dark pool or alternative trading system that only uses the Nasdaq TRF might be unable to operate during a disruption.

BLOOMBERG