Glitch halts SGX derivatives trade for nearly 2 hours

SINGAPORE — Barely three weeks into his new role as Singapore Exchange (SGX) chief executive, Mr Loh Boon Chye was reminded yesterday of the challenges in store for him after the bourse’s derivatives platform was hit by a glitch that stopped trading for nearly two hours.

Trading for derivatives was halted at 7.56pm because of a technical fault and restarted at 9.45pm, SGX said yesterday, adding that the market would close as per normal. Trading hours for derivatives differ by contract and underlying asset, but many derivative products trade till 2am.

SGX, South-east Asia’s largest bourse, has been relying increasingly on its derivatives business to shore up earnings amid a slump in stock trading volume. Revenue from SGX derivatives business, including a wide range of products from stock index to commodities futures, surged 42 per cent to S$295.7 million in its last fiscal year ended June 30, outpacing by a wide margin securities revenue, which declined 8 per cent to S$209.3 million.

The latest derivatives glitch came after the bourse suffered two major market outages, caused by a software error and power failure, late last year that resulted in a reprimand from the Monetary Authority of Singapore.

In June, SGX said it would spend about S$20 million to address gaps in its service-recovery capabilities. The remedial actions to be undertaken include strengthening its monitoring-system capabilities and disaster-recovery procedures as well as improving crisis communication processes.

Mr Loh, 51, a veteran banker who joined SGX on July 14 after leaving Bank of America Merrill Lynch, faces the task of making its trading systems more robust, boosting securities volumes and improving liquidity on the bourse. WITH AGENCIES