SGX outage due to hard disk failure
TODAY file photo
SINGAPORE — A hard disk failure that was not detected by an application designed to pick up the error was the root cause of the technical disruption that caused trading on the Singapore Exchange to be shut down from late morning last Thursday for the rest of the session, said the bourse operator on Tuesday (July 19).
An interim report on the cause of the disruption and the remedial action being taken has been submitted to the Monetary Authority of Singapore (MAS), and the final report will be ready by the end of the month, said SGX CEO Loh Boon Chye at a news conference on Tuesday. The exchange is in discussions with its hardware and application vendors — HP and Nasdaq, respectively — which are determining the cause of the disk failure and other aspects of the outage.
The disruption was prolonged due to problems in the orders and trade reconciliation process. As a result of the disk failure, some clearing confirmation messages were not generated, with the application attempting to resend all missed messages, which then resulted in some of these messages being duplicated, said SGX. At this point, trading ceased at 11.38am, with the SGX announcing that the market was expected to re-open at 2pm, before postponing this to 4pm, only to miss that target as well and suspending trading for the rest of the day.
As part of its remedial and follow-up measures, the SGX replaced the hard disk in question and is also conducting checks on the software.
“We are working with our vendor to review the application which sends out clearing confirmation messages, and will implement the necessary changes to ensure detection by the application of specific hardware problems,” said Mr Loh.
“We will improve our process in data generation, and fine-tune the data files to better enable our members in their reconciliation processes and will work with members to review their order and trade reconciliation process, to improve overall recovery and market resumption, in the event of a similar recurrence. We will increase the number of our Business Continuity Planning scenarios, which require industry-wide participation for reconciliation and recovery.”
The disruption — which occurred on Mr Loh’s first anniversary as SGX CEO — drew the attention of the MAS, which ordered the SGX to address the root cause of the problem and to submit a thorough investigation report. “MAS will review the investigation findings before deciding on the appropriate supervisory actions,” said a spokesperson at the regulator on Friday.
Mr Andrew Hartley, country head and managing director at financial services firm CLSA Singapore, said: “(The glitch) is unfortunate and disappointing but it is not new to global exchanges. There is no major impact but what is important is identifying the problem swiftly and making sure that contingency plans are in place.”
Last Thursday’s disruption is the latest in a slew of breakdowns that have hurt Singapore’s reputation as a financial hub. SGX suffered major trading disruptions on Dec 3, 2014, when the market opening was delayed until 12.30pm due to a software glitch. On Nov 5, 2014, power-supply issues led to a crash that halted the derivatives trading system for three hours. In August, derivatives trading was affected by a technical glitch for about two hours.
SGX is scheduled to report its full-year results after the market closes on July 27.
