Nasdaq OMX has blamed last week's three hour outage on a software problem that was triggered by a flood of messages from rival NYSE Arca.
The exchange has released a preliminary report on the issue, claiming it was forced to stop trading for 30 minutes because of a "confluence of unprecedented events" that overwhelmed its Securities Information Processor (SIP).
According to the report, the SIP received over 20 connect and disconnect sequences from NYSE Arca. This led to the system being inundated with more messages than it could cope with.
NYSE Arca apparently sent multiple messages reaching more than 26,000 quote updates per-port-per-second as it attempted to connect again.
This caused the SIP's failure and exposed a "latent flaw" in the system's software code.
On top of this, the available capacity was further affected when the SIP received a stream of inaccurate symbols and generated quote rejects from the rival exchange.
By Tony Aynsley