SINGAPORE Exchange (SGX) has set up a board of inquiry to investigate the cause of the power outage that disrupted trading in the bourse's securities and derivatives market for more than three hours on Wednesday.
The committee comprises four SGX board directors who are all independent of management. The chairman is Quah Wee Ghee, while the other three are Chew Choon Seng, Kevin Kwok and Lee Hsien Yang. Mr Quah is the current chairman of SGX's risk management committee.
The bourse will also appoint independent experts who have specialised knowledge and experience in data-centre and exchange-market operations, said SGX in a statement on Sunday. Further details, including the committee's terms of reference will be released this week.
One area that will be studied closely is why SGX's back-up power supply, known as the uninterruptible power supply (UPS), did not kick in when it should have. A day after the incident, SGX had revealed that a malfunction in the UPS at the bourse's data centre caused the outage.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that "something had failed" even though this equipment had been tested and gone through disaster recovery exercises.
"It's not just with regard to the primary power supply, but the backup system. They have to get to the bottom of that," he told reporters on the sidelines of a community event in Jurong on Sunday.
SGX, which is working closely with the Monetary Authority of Singapore (MAS) on the investigation, will look into its recovery processes and systems, and the decision-making process when a crisis strikes.
"Sometimes, you need a setback like this to look at all your processes very thoroughly, because crises don't happen often, but you have got to have a tight system of SOPs so that you can make decisions quickly and understand the risks and make a judgment quickly in that circumstance," said Mr Tharman.
Looking back, Mr Tharman said that the incident "does not help" Singapore's reputation as a financial hub, even though similar incidents have happened in financial centres in other countries.
"It doesn't matter what happens overseas, we've got to get it right here and make sure our reputation is kept intact," he said. "MAS is, of course, monitoring the investigation closely and will decide on any actions later."
MAS said last week that it takes the trading halt seriously and has already instructed SGX to take immediate measures to prevent a recurrence. The central bank added that it would not hesitate to take appropriate regulatory and supervisory actions against SGX should any lapses be uncovered in the investigations.
SGX said it recognised the "urgent need" to find out what caused the breakdown and why the back-up systems did not work. It promised to do "everything possible" to prevent a recurrence.