NYSE-ARCA Exchange Time Experiences Excessive Latency In May

Exchange time-syncing is something the SEC has admitted they're unable to police due to the inherent issues involved in technology and the dynamics of the physical world (aka Great Circle Path).

On Thursday morning, the one-man market monitor -- Eric Hunsader of Nanex -- displayed yet again how he can do the SEC's job in real-time. Perhaps it's time for the SEC to dump that MIDAS platform they are paying TradeWorx for and get a subscription to Nanex's NxCore (pronounced "N-Core").

Hunsader tweeted: "Starting May 16, 2016, the NY-ARCA clock shifted forward in time by ~1500 microseconds and has remained that way since."

Benzinga reached out to and asked for some charts that display this delay.

Recall back in 2011 when Yahoo! Inc. YHOO shares were trading in the future. Nanex's report on Yahoo showed executions at prices not displayed in the order book until 190 milliseconds later:

Fast forward to 2016 and we still have issues with timesyncs at the nations exchanges. NY-ARCA, beginning on May 16, began to have to it's clock drift ahead of the SIP (Securities Information Processor) by ~1500 milliseconds. The SIP is a public aggregation of all prices that the exchanges manage and sell.

The SIP was also the one of the key issues revolving around Direct Edge's CEO William O'Brien departure. O'Brien falsely stated that his exchange was using a "combination of the SIP and Direct Feeds" to match orders in their matching engine. Brad Katsuyama of IEX called out O'Brien on the mistake noting that Direct Edge only used the slower SIP for matching trades.

Hunsader's charts show the extreme gap between the updates on NY-ARCA and Nasdaq and BATS.

January 21, 2016 shows a reasonably tight range

May 16, 2016 shows the extreme jump from almost +250ms to -1500ms

Benzinga reached out to NY-ARCA and we were told the exchange would get back to us. As of the time of posting we have not heard back but once we do, we will update the story accordingly.

The issue at hand is the inability of exchanges to manage their clocks and the obviously lack of capability or motive by the SEC to investigate this issue. When a market maker who also owns interest in an exchange decides to take advantage of these unacceptable delays, the SEC appears to not be as bothered as they are when they find out Golfers are insider trading (forget the free pass Nancy Pelosi had when it came to here inside trading in Healthcare stocks and Visa Inc V).

Another example of American tax dollars being spent wisely under the guise of "protecting" investors.