Singapore Exchange Says Outage Was Result of Hardware Failure
July 19 2016 - 2:20AM
Dow Jones News
SINGAPORE—Singapore Exchange Ltd. said Tuesday that last week's
outage that caused trading to be halted for nearly a day was caused
by a hardware failure that wasn't detected by its automated backup
systems.
The exchange, better known as SGX, said a hardware disk that
runs an application to send out clearing confirmation messages for
completed trades had failed early Thursday. SGX's automated
software didn't detect the disk failure and so secondary backup
systems didn't kick in until activated manually.
Thursday's outage left brokers and traders confused and in some
cases concerned for their investments. Some brokerages, which place
orders on behalf of clients, said they had received multiple
confirmation messages when they entered a trade and were unable to
confirm whether orders had been successfully processed. In some
cases confirmation messages weren't received at all or came at
unexpected times.
After the problem with its systems was detected, SGX said it had
worked with brokerages to reconcile trades, but this took longer
than expected and it was forced to delay the market's reopening to
Friday.
The stock market operator promised to improve its systems,
reiterating its efforts to lift its image as one of Asia's most
prominent stock markets.
"As a result of disk failure, some clearing confirmation
messages were not generated," SGX said, adding that this resulted
in duplicate or missing clearing confirmation messages, forcing the
exchange to halt trading.
SGX, which is one of the most technically advanced stock
exchanges in the region, has had its reputation hurt by outages.
Thursday's glitch was the fourth such incident in two years. The
exchange, under its new chief executive, Loh Boon Chye, is trying
to build SGX's reputation as a sought-after destination for foreign
listings and as a derivatives trading hub for the region.
The complex nature of exchange infrastructure can magnify the
effects of even a small technical error, such as a power surge or
glitch in a backup system. Last year, for example, a faulty
software upgrade caused a nearly four-hour outage at the New York
Stock Exchange. In 2008, at the height of the global financial
crisis, a system failure at the London Stock Exchange cut off
investors for more than seven hours.
SGX said that it has contacted its hardware and software vendors
Hewlett-Packard Co. and Nasdaq Inc. to conduct an investigation
into the problems, and has replaced faulty hardware. It also
promised to improve planning scenarios for trading disruptions and
has submitted a preliminary incident report to its own regulator,
the Monetary Authority of Singapore.
On Monday, the stock exchange said that it will transfer its
self-regulatory functions to a separate subsidiary company as part
of its efforts to build on its credibility and tackle criticisms of
its dual role as a profit-seeking company and market regulator.
Write to Jake Maxwell Watts at jake.watts@wsj.com
(END) Dow Jones Newswires
July 19, 2016 02:05 ET (06:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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