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SGX outage triggered by hardware issue

SINGAPORE — The technical malfunction that hit the Singapore Exchange (SGX) and forced the bourse to shut down trading mid-day on Thursday (July 15) was triggered by a hardware issue, said SGX’s CEO, adding that short-selling during the day was not significant.

The SGX Centre on July 14, 2016. Photo: Koh Mui Fong/TODAY

The SGX Centre on July 14, 2016. Photo: Koh Mui Fong/TODAY

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SINGAPORE — The technical malfunction that hit the Singapore Exchange (SGX) and forced the bourse to shut down trading mid-day on Thursday (July 15) was triggered by a hardware issue, said SGX’s CEO, adding that short-selling during the day was not significant. 

“A hardware issue triggered our trade messaging system to generate trade confirmation messages to our members which were duplicated or omitted. These messages therefore needed to be reconciled before trading could resume,” said SGX CEO Loh Boon Chye on Friday.

“We will commence on a post-mortem after market close today and update with more details, including the cause, by next week,” he added.

The disruption also drew the attention of the Monetary Authority of Singapore (MAS), which instructed 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 an MAS spokesperson.

On Thursday, trading in SGX’s securities market was suspended at 11.38am after trade confirmation messages were found to be duplicated. 

The local bourse subsequently said it was planning to resume trading at 2pm, but did not, as the process to reconcile the missing and duplicate messages resulted in a longer process than anticipated. 

It then postponed trading to open at 4pm, but at 4.01pm, SGX told the market it would not reopen for the day. The SGX resumed its regular trading hours at 9am on Friday.

The Straits Times Index (STI) opened up 0.82 per cent or 23.74 points at 2,930.66 but gave up some gains intraday to close up 0.63 per cent or 18.43 points at 2,925.35.

Following Thursday’s disruption, Mr Loh stepped up to apologise on behalf of the SGX. “We are not pleased with our own recovery time and it has to be better and we will do better,” he said.

Investors who shorted their positions on Thursday would be waived of buy-in penalties, as the amount of short-selling on that day was “insignificant”, said Mr Loh. 

Those who had shorted their positions on Thursday could recover their positions on Friday as the market was open, Mr Loh ­responded to an enquiry.

The exchange did not give details on possible losses made due to the disrupted trading and only said they opened the market on Fiday morning according to the usual opening time and “the (trading) positions were reconciled”.

Senior sales trader and institutional sales at CMC Markets Alex Wijaya said: “It is difficult to tell on a specific number for the loss. The main loss would probably be the loss in opportunity in trading volume for the market. Market volume is already thin, the impact should be less on the retail side and more on the exchange side.”

Thursday’s disruption took place  smack bang on Mr Loh’s first-year ­anniversary at the SGX. He took the helm on July 14 last year.

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