Microsoft Outage Halts Structured Notes Trading

A massive global Microsoft outage brought trading in some complex derivatives to a virtual standstill on Thursday as dealers were unable to negotiate terms and exchange legal documents without email, Risk.net reported.

Structured notes suffered the biggest disruption during the incident. Transactions for these complex instruments cannot be completed without the exchange of several legally binding documents, including prospectuses, pricing supplements, and confirmations, according to Risk.net.

The technical issue also affected 430 million users globally, leaving people without access to Outlook email and Teams meeting tools, CNN reported. Microsoft said that the disruption stemmed from a network capacity upgrade that surfaced following a recent network change.

The disruption caused widespread logistical hurdles across multiple continents as office workers, schools, and government agencies scrambled to find workarounds. In Australia, businesses could not print invoices, live feeds from courts went down, and some schools texted parents to phone in student absences, CNN reported.

The Anderson Economic Group estimated that the outage could cost $7 billion in lost productivity. Firm president Patrick Anderson said that perhaps as many as 26 million users on Thursday and 51 million users on Friday saw their operations disrupted in a way that caused an economic loss, according to CNN.

“We are deeply sorry for the disruption this incident has caused our customers and partners,” Microsoft said in a post on X, according to CNN.

Microsoft reported that email delivery queues decreased and returned toward normal levels by Friday afternoon. The company said that it addressed the underlying issue and continued to restore service to remaining customers and regions gradually.

“We have addressed the underlying issue and continue to restore service to remaining customers and regions,” Microsoft said.