Tonight’s addition of a single second to system clocks will no doubt underwhelm the world, much as Y2K did – systems will probably not fail (although the last time a leap second was added – in 2012 – there were in fact system outages). But this fascinating phenomenon, whereby “Coordinated Universal Time” (UTC) is tweaked so that it more closely matches mean solar time (so-called “UT1”) – based on the earth’s rotation – potentially disrupts the rational determinism of global computer systems.
Indeed, one major operating systems vendor reminds us that “as 23:59:60 does not exist in Unix's implementation of UTC then the linux kernel inserts the leap second by stepping the system clock back by one second on the first clock update after 0:00 UTC”. Of course systems stop and start all the time, software is patched, data is loaded, or archived, and time marches on. But we depend on the persistence and consistency of the technology we use. A shift in time, even by a second, flies in the face of the finite measurability of software behavior.
Stability in financial technology has become a big focus of regulators. In the US the SEC has mandated monitoring and stability at the exchange level in Reg SCI, and there are similar provisions in MiFID II. Operational stability does not inspire the kind of heated debate that, say, derivatives regulation does; but it is now part and parcel of the culture and working technology environment of financial institutions, and also part of the assumptions (explicit and implicit) by regulators of how institutions should behave.
Financial institutions are prepared for tonight’s leap second (many exchanges will close their late trading sessions in preparation), and when we awake tomorrow we will be none the wiser that time has shifted. But this event reminds us that we can’t take system stability for granted, and that complex systems need oversight. Disruptions can be sudden and abrupt, or more gradual: without visibility into technology systems (whether simple system health or more complex business insight), institutions are not prepared for the dynamic shifts in the environment around them.