SGX CEO sticks close to script, offers few details on cause of outage

SINGAPORE Exchange chief executive, Loh Boon Chye, stuck closely to a script during a Friday press conference, giving few details about the cause of technical and process issues that shut down the stock market for all but 2.5 hours on Thursday.

"Our focus was to recover, minimise downtime and resume trading," Mr Loh said in response to several attempts by journalists to find out more about the nature of the Thursday outage. "Immediately upon this, which we opened the market today, we're devoting all necessary resources to review, identify our recovery process and work on any gaps to better our recovery time."

He did announce, however, that SGX was waiving the buy-in penalty so that shortsellers would not suffer a loss for not being able to deliver the shares to cover their positions.

SGX announced before the market opened on Friday that a "technology issue" affecting its trade confirmation processes was identified at 9:38am on Thursday. The exchange, which uses technology provided by Nasdaq, switched to secondary trade confirmation systems at 10:12am. But missing and duplicate trade confirmation messages were detected. This forced SGX to suspend trade matching and execution at 11:38 am, allowing only orders to be placed, removed or adjusted. Plans to reopen the market throughout Thursday were repeatedly delayed as reconciliation of positions took longer than expected.

The market only reopened on Friday morning following normal schedules.

"Our securities market opened today and trades are orderly," Mr Loh said at the press briefing on Friday at about 10:45am. "Let me reassure you that the trade confirmation messages issues from yesterday have been resolved."

But what was it exactly that caused the problems with trade confirmation?

After much prodding, Mr Loh would say only that it was not a capacity issue, and that the glitch "was discovered with a trigger to a hardware".

Asked to shed light on the possibility of a vendor issue, Mr Loh described Nasdaq as a long-time technology partner, and recycled the same answer: "Our immediate focus was recovery, minimise downtime and resume trading as soon as possible, thereupon and immediately we'll review and devote all necessary resources to understand how we can better our processes and better our recovery time."

As for the problems in reconciliation that delayed the re-opening of the market after the technical problem was solved, Mr Loh said that there were issues with extracting files and in the actual process of reconciling positions with the brokers.

But what exactly caused those problems with file extraction and the reconciling process? Pay attention now:

"We were focused as the problem occurred to recover, minimise the downtime and to resume trading as soon as possible, and reopen the market today. Immediately upon this, we are reviewing the situation and as I said we will devote all necessary resources to that," Mr Loh said.

What did Mr Loh have to say about how SGX plans to address questions about its reputation?

"When disruption occurs, our immediate attention is recovery, minimise downtime and resume trading. Our recovery process could have been better, we acknowledge that, we sincerely apologise, and we'll do better."