SINGAPORE: The “technology problem” that caused the shutdown of the securities market on Thursday was “triggered by hardware”, said Singapore Exchange (SGX) CEO Loh Boon Chye in a conference call on Friday (Jul 15).
Mr Loh clarified that SGX’s technology is supplied by Nasdaq, but did not say if the problem originated internally or from the vendor.
Trading, which eventually resumed Friday morning, had been suspended due to issues over SGX’s trade confirmation and trade automation processes.
These issues have been resolved, said Mr Loh, adding that staff have “worked around the clock, worked very closely with the members to reconcile any duplicated, or missing trade confirmation messages from yesterday”.
“I want to sincerely apologise on behalf of all at SGX, for many inconveniences I’m aware we’ve caused to our members, traders, investors, and partners,” said Mr Loh. “We’re not pleased with our recovery time. It has to be better, and we’ll do better.”
WE WERE “FAIR, ORDERLY, TRANSPARENT”: SGX
SGX aborted two attempts to reopen the bourse on Thursday. Explaining why this was the case, Mr Loh said that the recovery process took longer than expected.
“We understand the importance of reopening and were pressing on to do so. But the challenges in reconciling the missing and duplicate messages resulted in a longer process than anticipated,” he said.
“Some of the challenges we faced include extracting the files, as well as the actual process of reconciling the trade confirmation with members,” he said, adding that this had to be done individually with all 24 members.
SGX also said it took into consideration members’ feedback not to resume trading for the day.
Mr Loh emphasised that the question that guided SGX’s decision-making at each turn was: "Are we operating a fair, orderly and transparent market for the overall marketplace and all participants?”
RECURRING TECH ISSUES?
Thursday's trading disruption is the first major disruption since two disruptions in late 2014. The two disruptions, caused by a software error and a power failure, led to a rebuke by the Monetary Authority of Singapore (MAS) and a moratorium on fee increases.
SGX also faced other technology-related woes in the recent past, with trading on its derivatives market suspended last August due to a technical fault.
The bourse operator said it committed S$70 million and S$75 million to technology-related capital expenditure for the latest financial year ending Jun 30. Earlier, in the aftermath of the outages in 2014, it said it will invest S$20 million to infrastructure investments.
MAS said in a statement late Thursday that it was monitoring the latest outage situation closely.