The Tokyo Commodity Exchange (Tocom) suspended trading today for more than three hours due to connectivity issues. The shutdown came days after the exchange upgraded to a technology platform from Nasdaq OMX Group. According to Tocom, its shared network gateway began experiencing connectivity problems at 10:30 a.m. About one hour later, the venue halted all trading to switch off its router. Connectivity was restored at 2 p.m. and trading resumed at 3 p.m. for half an hour. â€œAlthough the cause of the problem remains unidentified, system connectivity is now restored to a normal condition,â€ announced Tocom, Japan’s largest commodity market. â€œWe will give further notice on the cause of the problem once it has been identified.â€ The night session began as usual at 5 p.m. Tocom introduced night trading with the May 7 launch of its next-generation system, which is based on a trading and clearing platform from Nasdaq. NTT Data Corp., a Tokyo-based technology vendor, provided systems integration. â€œThis is just an old-fashioned software management issue that is hard to eliminate,â€ said Kevin McPartland, an analyst at New York-based Tabb Group. â€œYou can test and test and test, but itâ€™s impossible to truly simulate a production environment.â€ McPartland said he doesnâ€™t expect the problem to affect liquidity at the exchange. â€œBut ultimately,â€ he added, â€œitâ€™s not a good showing.â€ Observers may imply that there is a connection between the outage and the Nasdaq platform, according to Bob McDowall, an analyst in TowerGroupâ€™s London office. â€œThere probably will be some sort of linkage,â€ he asserted. â€œBut itâ€™s hard to tell at this time.â€ McDowall added that he has not heard of the Nasdaq system causing outages at other market centers. Cultural differences may be exacerbating the issue. â€œCulturally, it is often more difficult to understand the problem and who is responsible,â€ said McDowall. â€œThe Tokyo Stock Exchange had similar technical problems two years ago. It doesnâ€™t help the reputation of the market, of the participants, or of the technology, until we find out what the facts are–what exactly did happen.â€ The problem was most likely connected to the integration work and not the trading platform, surmised Sang Lee, managing partner of Boston-based research firm Aite Group. â€œAny time a new exchange platform launches, there is a high probability glitches will occur due to many moving parts and uncertainty over connectivity in a live trading environment.â€ According to Lee, the exchange tested the platform for two months before going live. â€œAs the current breakdown demonstrated, the actual stability of the platform is difficult to gauge until actual live trading takes place,â€ he said. In April 2008, a Tocom spokesperson told Securities Industry News that the cost of the new platform, including initial development and five years of operational expenses, is about 8.8 billion yen ($91 million).