The Business Times

Power-less SGX halts markets for hours

'Multiple power supply issues' behind one of the biggest market disruptions in recent years

Published Wed, Nov 5, 2014 · 09:50 PM
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FRUSTRATED traders stared at blank screens for at least three hours on Wednesday afternoon as a power outage shut down the Singapore Exchange's (SGX) securities and derivatives trading systems, one of the biggest market disruptions in recent years (See major disruptions here).

Industry veterans complained of inadequate communication from the market operator, and asked if reopening the market at 5.15pm was sound when some systems still seemed to be glitchy at that time.

"Clients were calling frantically, worried about what was going on. Some of them said 'Okay, we'll just cancel and wait to do the trade tomorrow'," one trader said. "One less day of trades for me is one less day of income."

In a statement, SGX said that market participants were disconnected from the securities and derivatives trading systems at 2.18pm because of "multiple power supply issues". The power malfunction was not deemed to be the result of a cyber attack.

"We apologise for today's outage and the inconvenience caused to market participants," SGX chief operations and technology officer Tim Utama said in a statement. "We are currently investigating the root cause for the disruption."

SGX declared a formal trading halt at 2.51pm. During the outage, all broking members were disconnected from SGX's trading engines. Corporate announcements were also unavailable. Securities trading resumed at 5.15pm for a half-hour of continuous trading, while the derivatives market reopened at 7pm.

There was widespread confusion during the outage over the cause and timing of market reopening. One message that made the rounds just after 4pm had the equity market reopening at 4.30pm, 45 minutes too early.

"There was no proper information and they were slow to tell us that this is what's going to happen," the trader said. "Don't forget, we've got to tell the clients too."

Traders said that problems persisted even after the stock market reopened, raising questions about a level playing field. One dealer said that some servers had faster access to price information than others immediately after the reopening. Another said that market summaries did not seem to reflect actual markets, with inaccurate bids and offers.

The dealer asked that some kind of penalty be considered for SGX.

The Monetary Authority of Singapore said it is keeping tabs on the investigation.

"As part of IT and operational risk management, approved exchanges are required to investigate promptly the causes of system breakdowns and take immediate measures to rectify system failures and restore customer services. MAS is following up closely with SGX on the investigations," a spokesman said.

This is one of the most serious trading outages in recent years, and the most widespread stoppage since 2007, when glitches hit the old Sesops trading system. The most recent glitch, which did not disrupt trading, was an eight-hour disruption in the corporate announcements portion of SGX's website.

Exchange-originated trading disruptions have also occurred in other markets recently. Last week, Deutsche Boerse's equities platform was halted for over an hour due to a computer malfunction. In August, software issues led to a four-hour disruption at the Chicago Mercantile Exchange.

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