So Much for a Quiet New Year

I set out to write this week's column about predictions for 2007 and witty New Year's resolutions for the industry while Robert Burns' Auld Lang Syne played in the background. But then I remembered the famous verse from Burns' poem, To a Mouse: "The best laid schemes o' mice an' men gang aft agley."

For those not up on their Scottish dialects, this loosely translates to "stuff happens." This was painfully apparent to anyone in Asia needing to connect to the U.S. markets last week.

The powerful earthquake off the coast of Taiwan hit only two years and a day after the tragedy of the 2004 tsunami that devastated coastlines bordering the Indian Ocean. Luckily, last week's earthquake didn't spawn a tsunami, but it did a serious number on the submarine fiber-optic network connecting Asia to the U.S.

The telecom vendor that owns the cables is working to repair the damage done by the earthquake and its aftershocks, but that could take up to three weeks. In the meantime, brokerages as well as connectivity and market data providers are scrambling to restore their connections and return to normal transaction levels.

When it comes to business continuity planning and testing, many industry participants have had to deal with imagined "regional" outages, but many confess that they never considered what could trigger a regional outage. Now they know.

So far, the current solutions to the lost connection problem have included routing traffic to smaller secondary circuits in the submarine network and routing some traffic to satellite-based networks. This seems to be working for the most part, but as volumes increase as traders return from their year-end holidays this week, will these solutions hold or is the industry just beginning to feel the real pain? Time will tell.

Although the Atlantic Ocean isn't as seismically active as the Pacific Ocean's Ring of Fire, would firms and vendors be prepared if something similar happened to transatlantic connections? I felt that BCP manual get a little heavier as a new chapter has just been added.

Earth-shaking events aside, we at DWT wish you a very Happy New Year.

Comments? Send them over to me at rob.daly@incisivemedia.com.