The eight-hour breakdown was the worst in the history of the exchange. Software problems forced a shutdown of its electronic trading platform, leaving stockbrokers unable to trade on the last day of the tax year – one of the busiest on the exchange’s calendar.
Shareholders could face huge unexpected tax bills as a result of the collapse. Trading was extended until 8pm. But any investors hoping to use up their £7,100 annual capital gains tax exemption by selling shares to cystallise a gain or a loss in order to cut or wipe out their CGT liabilities who was unable to trade in the chaos faces an unexpected tax bill.
Last night the Inland Revenue and the Treasury ruled out any concessions.
According to The Times, Martin Wheatley, LSE director of markets development, said the fault, which provided dealers with incorrect share price information, was indentified before the start of trading.
He said the decision was made to shut down the exchange rather than allow trading to start using incorrect data. Andersen Consulting designed and manages almost the entire Stock Exchange IT system under two contracts, signed in 1992 and 1997, worth £120 million over ten years.
Wheatley told The Times the exchange would ‘look into’ its contractual and licence relationship with Andersen to determine if it had any legal or financial redress.
A spokesman for the firm told The Times: ‘We did the trading systems so you can assume it [the problem] has got something to do with us.’
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