The ‘leap second’ — another Y2K moment?
On June 30, at midnight Greenwich Mean Time/Coordinated Universal Time, an extra second will be added to the world’s master clocks so that they sync up with the earth’s rotation, which does not precisely match the clocks and computers we earthlings use.
Financial exchanges and firms that depend on precise pricing and transaction data are planning for this so-called “leap second” down the micro-second.
“It’s a big issue for financial firms,” says Victor Yodaiken, whose software firm, FSMLabs, provides time-synchronization computer applications to those firms. “A whole second is a long time. Software is really not set up to see time go backwards.”
U.S.-based exchanges have a deadline of Friday to submit their plans for dealing with the leap second to the U.S. Commodity Futures Trading Commission.
Yodaiken says high-frequency traders are particularly sensitive to the problem because of their automated algorithms.
Meanwhile, U.S. exchanges and those in Asia (Japan, Australia, Singapore and South Korea) will adjust to the extra second by spreading it out over a longer period or adding it later in the day. “During the trading day, their clocks will be different,” says programmer-analyst Steve Allen at the University of California’s Lick Observatory. He is dealing with an automated telescope that will have to adjust to the leap second. “There will be moments during that day when transactions from one market to another seem to come from the future.”
Some U.S. exchanges will pause around the leap second as a precaution or will halt after-hours trading beforehand.
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