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SGX STOPPAGE

Market reopens smoothly, new measures in place

Friday, November 7, 2014 - 05:50
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Singapore

THE Singapore markets had a smooth reopening on Thursday following a major stoppage on Wednesday afternoon. Singapore Exchange (SGX) president Muthukrishnan Ramaswami said at a press briefing on Thursday that SGX has put in place new measures to reduce recovery times should a power management system fail again.

Except for duplicate matches for "good till cancelled" orders from Wednesday morning, order matching went as expected after the securities market reopened at 5:15pm following a three-hour disruption that afternoon, Mr Ramaswami said. The duplicate orders were reversed by lunchtime on Thursday. No issues were faced in the derivatives market.

SGX said the market halt - the longest and most complete disruption of the Singapore financial markets in at least seven years - was caused by a malfunction of an "uninterruptible power supply" system over a span of just about four minutes. That was at roughly 2:18pm. The system was supposed to ensure continuity of power supply to SGX's data centres despite fluctuations from two power plants.

The Monetary Authority of Singapore (MAS) said it "takes a serious view" of the disruption. "We have instructed SGX to take immediate remedial action to prevent a recurrence," an MAS spokesman said. "MAS has also instructed SGX to conduct a thorough investigation to find out the root cause of the outage and submit its investigation findings to MAS. MAS will not hesitate to take appropriate regulatory and supervisory actions against SGX should lapses be uncovered in the investigations."

Mr Ramaswami said the market operator was concerned that the backup data centre was not properly synchronised because of the power fluctuations. Given that uncertainty, the Exchange took the decision to reboot the system at about 2:51pm. Rebooting would take another 1.5 hours.

Market participants were informed at about 4:31pm about the reopening time for the securities market. Reopening time for the derivatives market was communicated at 5:56pm.

The securities market was reopened at about 5:15pm on Wednesday for half an hour of continuous trading to allow investors to adjust positions within the day. No issues were seen on Thursday.

SGX will continue testing the system over the weekend. Mr Ramaswami said the faulty system was SGX's own responsibility to maintain, and he does not expect any claims, by or against the Exchange, to arise from Wednesday's disruption. The system was last tested in August.

SGX declined to reveal how much downtime the system has had over the past year.

Commentary: Let there be light when disruption strikes

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