Authorities give SGX two years to improve recovery process

Financial regulator orders SGX to implement new measures after trading halt in July last year.

Singapore Exchange (SGX) has been given 24 months to improve its recovery processes after the disruption caused by a trading halt in July last year.

The Monetary Authority of Singapore (MAS) has ordered SGX to implement new measures after it failed to restore functioning of its systems within four hours as required by the regulator.

The Industry Working Group (IWG) - comprised of SGX and industry stake holders - is working with the exchange on the improvements and the venue is to contribute SGD$1.5 million to fund the costs incurred by brokerage firms throughout the process.

Trading on SGX ground to a halt on SGX in July 2016 as duplicate trade confirmations were being generated by its systems.

Originally, SGX had suggested that trading would recommence at 2:00pm that day and then 4:00pm, but the exchange did not manage to reopen until the following trading day.

Ong Chong Tee, deputy managing director of financial supervision at MAS, explained the authority takes a serious view of trading disruptions.

“Technology system-related breakdowns can never be zero-probability occurrences and this is why SGX should strengthen its recovery process,” he said.

SGX must complete the implementation of these recommendations within two years and MAS added: “The implementation of these recommendations will involve changes to the systems and processes of both SGX and the brokerage firms.”