The COVID-19 pandemic is disrupting operations but exchanges and banks are acting to protect themselves.
Barclays in NYC, Deutsche Bank and Wells Fargo report that COVID-19 has infected employees as the big exchanges revamp operations or go electroncic.
The pandemic is disrupting operations, resulting in strategies to help infected or potentially infected staff, and the launch of business continuity and disaster recovery plans.
Here is a roundup of the major developments:
CME & Cboe Halt Outcry Trading
The pandemic has impacted major operations at the New York Stock Exchange (NYSE), which according to a Reuters report is implementing ways to keep traders apart on its very active outcry trading floor in the 11 Wall Street building. NYSE, which is owned by Intercontinental Exchange Inc. (ICE) will also be taking steps to help other NYSE and ICE employees.
An ICE/NYSE media representative acknowledged key facts in the Reuters story but declined to share the internal memo with FTF News.
Distributed to employees on Wednesday, March 11, the memo from Michael Blaugrund, CFA, the chief operating officer (COO) for NYSE, specifies that separate entrances and eating spaces have been designated for floor traders and staff in an effort to keep the trading floor safe from any outbreak in the office tower at 11 Wall Street.
In a March 17 update, ICE/NYSE officials note that: “The NYSE trading floor, as well as our options floors in New York and San Francisco, remain open and operating. The members of the trading floor community, exercising their human judgement over trades, play a vital role in reducing volatility of individual stocks during historic fluctuations in the market,” according to a prepared statement.
“While we constantly test our resilient systems that allow us to operate the NYSE in a fully electronic fashion — and can move at any time to all-electronic trading, if necessary — we are also taking appropriate measures, working with local, state and federal governments, and our regulators, to achieve our shared goal of ensuring that the trading floor remains open for business during this volatile period,” according to ICE/NYSE officials.
In Chicago, the CME Group did close its derivatives trading floor after business on Friday, March 13, according to an official statement.
Despite the closure, “all products will continue to trade on CME Globex as they do today,” according to the announcement. “No coronavirus cases have been reported on the trading floor or in the Chicago Board of Trade building. The reopening of the trading floor will be evaluated as more medical guidance on the coronavirus becomes available. The company’s headquarters at 20 S. Wacker Drive will remain open.”
Globex is used to electronically trade futures and options while fixed income trading can be done via the CME Group’s BrokerTec system and foreign exchange trading is handled by the EBS platform.
Also, in Chicago, Cboe Global Markets temporarily closed its Cboe Options Exchange (C1) trading floor at the close of business on Friday.
“Trading on C1 will continue to be available in an electronic-only trading mode until further notice,” officials say. “This is a proactive measure and not in response to any confirmed cases of COVID-19.” Cboe officials did not say when they would reopen the trading floor.
Banks Act to Mitigate Infection
In New York, officials at Barclays have confirmed that a staff member has tested positive for the virus
“We can confirm that a member of our staff based in our New York trading operation has tested as positive for COVID-19. The health and safety of our staff, customers and clients is our top priority and we are providing every support to the member of staff and their family,” a spokesperson tells FTF News.
“We are working closely with the Centers for Disease Control and Prevention (CDC) and other local authorities, and are following their advice. The colleague has been in self-quarantine since March 3, following notification of their potential exposure to the virus. We have thoroughly cleaned and disinfected the colleague’s workspace and the surrounding area, in accordance with CDC guidelines, and are undertaking additional, ongoing deep-cleaning as a precautionary measure. We have also identified colleagues and clients who had close contact with our affected colleague, and have advised those colleagues to self-quarantine in line with CDC guidance. At this stage, we are operating business as usual; we continue to monitor the situation closely and will take further action as appropriate.”
On the West coast, a Wells Fargo employee not affiliated with any of its trading floors had a positive test result.
“On Saturday, March 7, Wells Fargo was informed by the San Francisco Department of Public Health (SFDPH) that an employee working on the 23rd floor at 555 California Street in San Francisco has tested positive for COVID-19,” according to a prepared statement from the bank. “The employee is at home while their health is being closely monitored by their doctor and public health authorities. We wish our colleague a full and speedy recovery and will provide our full support.”
“Our first priority remains keeping Wells Fargo employees and customers safe and well-informed. After being notified that the employee had prolonged, close contact with an individual with a confirmed case of COVID-19, we performed enhanced cleaning at the location and asked employees who work on the floor to work from home on Friday, March 6,” according to the statement.
“Following guidance from the SFDPH, we have asked all employees who were in prolonged, close contact with the individual to not come into the office for the next 14 days. With the location now thoroughly cleaned and identified employees not coming into the office for 14 days, the location resumed normal operations on Monday, March 9. This situation does not impact other Wells Fargo locations in San Francisco.”
In Europe, Christian Sewing, CEO of Deutsche Bank, acknowledged in a memo dated March 12 that some bank employees have the virus.
“Several of our colleagues have been confirmed as having contracted the virus … We have implemented appropriate measures in line with the situation on the ground or in the respective area of the bank. Many teams have switched to split mode, while others are partially relying on staff working from home. We have reduced business travel to a minimum and have cancelled large-scale events,” according to the memo.
“If we take these precautions, I am confident that we will manage this situation together. We have devised comprehensive crisis plans, we have the discipline, and we have the financial strength to manage through this period,” Sewing says.
BCP and Working Remotely
Goldman Sachs officials last week announced to employees that they would be activating global business continuity planning (BCP) strategies on March 16. Staff members have been instructed to take measures based upon roles and divisions.
Staff will either “work from an assigned fixed location, which means you will work from one of our main buildings or a BCP site without rotation and until further notice; or work as an assigned member of a Blue or White team that will alternate weekly between working from one of our main offices and from home,” according to the statement.
“Blue teams will be in the office the week of March 16, with White teams working from home, and vice versa the week of March 23 – alternating thereafter,” officials say. “Specific instructions will be communicated by business and location.”
In addition to the BCP activation, the firm has taken precautionary measures for its 30 Hudson Street location where an employee at a fitness center contracted COVID-19 and is being treated. “Out of an abundance of caution, the fitness center will remain closed until further notice. All other areas of the building remain fully operational,” according to Goldman Sachs.
In keeping with push for precautionary steps, self-regulatory organization the Financial Industry Regulatory Authority (FINRA) has issued a guidance for remote offices or telework arrangements.
“In such cases, FINRA would expect a member firm to establish and maintain a supervisory system that is reasonably designed to supervise the activities of each associated person while working from an alternative or remote location during the pandemic,” according to the guidance.