As U.S. equity markets opened and resumed trading last Wednesday, the impact of Superstorm Sandy began to dissipate. Opening auctions ran smoothly. Trading volumes were high, but not unusually so. Share-price volatility was normal. Behind closed doors, however, U.S. exchange operators were still discussing the market-structure issues revealed by the massive storm, which halted trading in U.S. equities for two days — the longest weather-related closure since the blizzard of 1888.

Although the decision to shutter the market was reached by industrywide consensus late on Sunday night, before the storm hit, the responsibility for the shutdown was not shared equally among U.S. exchange operators. Nasdaq OMX, which operates fully electronic trading platforms, had been ready to open on Monday. BATS Global Markets, which also operates electronically — and is headquartered in Lenexa, Kansas — was prepared to open its electronic exchanges for trading on Monday, too. But NYSE Euronext, the operator of the much-vaunted New York Stock Exchange, hesitated to open its floor-trading operation on Wall Street and risk endangering staff.

NYSE did have a business continuity plan in place, which it fully intended to set in motion on Monday. The plan, according to Joe Mecane, head of U.S. equities for NYSE Euronext, was to close the trading floor and operate exclusively on Arca, the exchange operator’s electronic trading platform. Almost as soon as NYSE announced its plan to its member firms, however, the pushback came hard and fast, say industry sources. The proposed switch apparently caught some broker-dealers by surprise and would have required them to send their own programmers into the city to reconfigure order-routing software on Sunday night, even as the winds rose and the subway system closed — a prospect that caused considerable alarm.

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