The world is approaching another Y2K moment and preparing for an extra second being added to the clocks in the early hours of tomorrow.
While precautions are being taken around the world to avoid any glitches, there is a measure of uncertainty for high-frequency traders who are used to making bundles or losing just as much in the space of milliseconds.
The extra second is being added because the rotation of the Earth is gradually slowing, scientists say. “It is indeed true that time stamp is the bigger issue in protocol,” said an investment banker.
Steen Jakobsen, the chief investment officer of Saxo Bank, the Danish investment bank, said: “The industry should be prepared and I’m sure some high-frequency traders will stop trading due to this ‘prepared glitch. “It also shows how dependent we are on ‘internet time’ and I remain of the opinion that IT security constitutes the biggest risk overall for the financial system.”
The Emirates Metrology Institute (EMI) yesterday said that a leap second will be added to UAE standard time just before 4am on July 1 when clocks will read 03:59:60.
The move aims to conform with other timing centres around the world, which will also add a leap second at the same time, 11:59:60pm Greenwhich Mean Time tonight.
The extra second is being added to adjust for the slight differences in time between highly accurate atomic clocks and the rotation of the globe, EMI said.
The Abu Dhabi Stock Exchange, Nasdaq Dubai and a number of banks were not immediately to comment on the matter. ADS Securities, the forex broker, declined to comment.
Tariq Qaqish, the head of asset management at Al Mal Capital, said algorithm traders abroad could probably make money out of the event but in the UAE such high frequency does not really exist as markets are not as liquid as those in New York and London.
mkassem@thenational.ae
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