SGX sets up group to boost market’s operational resilience

SINGAPORE — In the wake of the July 14 outage that shut trading on the Singapore Exchange (SGX) for half a day and undermined investor confidence, the bourse operator said on Tuesday (Sept 6) it has formed a Securities Industry Working Group (IWG) to assess and make recommendations to improve the securities market’s operational resilience.

“Markets are becoming more complex with increasing dependency among participants, and the attendant risks of multiple points of disruption are ever present,” said Mr Ho Tian Yee, who has been appointed to chair the IWG. He is currently a board member of Singapore’s biggest banking group DBS and Chairman of Fullerton Fund Management, a wholly-owned subsidiary of state-owned investment firm Temasek Holdings.

The 13-member IWG represents a broad swathe of the investment community, and includes SGX President Muthukrishnan Ramaswami; SGX Head of Equities and Fixed Income Chew Sutat; Securities Investors Association (Singapore) President David Gerald; CIMB Securities CEO Carol Fong and PwC partner See Hong Pek, among others.

In making its recommendations, the IWG will take into consideration the findings from feedback garnered from members and participants as well as SGX’s own investigations following the July 14 market disruption. The SGX had said in July that the root cause of the outage was a hard disk failure that was not detected by an application designed to pick up the error.

The areas that will be reviewed by the IWG include the provision of back-up systems and processes as well as the ability to re-connect SGX and its market participants following a disruption; protocols and processes between SGX and its members to resume trading promptly in the event of a disruption; as well as business continuity planning and industry-wide exercises to test SGX and market participants’ readiness to respond to disruptions.

The IWG is expected to complete its assessment and submit its recommendations to the Monetary Authority of Singapore by the first quarter of next year.