MAS orders 'thorough' report on SGX outage

THE Monetary Authority of Singapore (MAS) said on Friday that it "takes a serious view" of the July 14 extended shutdown of the Singapore stock market.

The Singapore Exchange (SGX) "has a responsibility to ensure that its system and recovery processes are robust," MAS said after the market closed. "We have instructed SGX to address the root cause of the problem, and to submit a thorough investigation report to MAS. MAS will review the investigation findings before deciding on the appropriate supervisory actions."

MAS's statement came one day after SGX suspended order matching and trade execution on its securities platform due to a technical glitch caused errors in the generation of trade confirmation messages.

The halting of trading activities began at 11:38am on Thursday, and the market could not be reopened until the normal opening time on Friday because reconciliation of positions with brokers took longer than expected.

This is the second time in almost two years that MAS is looking into a possible supervisory response to an outage on SGX.

In June 2015, MAS reprimanded SGX for outages in November and December 2014, highlighting that SGX had failed to recover critical systems within a four-hour target in the November disruption.

MAS at that time also imposed a prohibition on SGX raising fees for the securities and derivatives markets until it had completed improvements to the satisfaction of the financial services regulator.

SGX also donated S$1 million to an investor education fund, and said it would spend S$20 million to speed up its technology infrastructure improvement.

In addition to the two 2014 disruptions, SGX also experienced disruptions to its derivatives platform in August and October 2015.