The Australian Securities Exchange was forced to halt trading across all securities on Monday after succumbing to technical issues that had interrupted the session.
The exchange operator’s first big outage in almost five years came only weeks into the tenure of Dominic Stevens, the ASX’s chief executive, who has been tasked with leading the company’s charge into new technologies for trading and execution.
The exchange traced the problem to a hardware failure in its main database, and forced it to shut down trading. It ruled out any cyber security issues.
“What happened today does not meet the high standards of operations and system reliability that we set ourselves, and that our customers should rightly expect of us. We apologise for the disruption,” Mr Stevens said.
Big outages on the world’s largest exchanges are usually sporadic. In July SGX, the Singapore exchange, halted for two hours when it discovered a software problem, the latest in a series of outages for the city-state exchange.
It was the ASX’s first big technical problem since October 2011, when a glitch froze the exchange for four hours.
The outage adds to the challenges facing Mr Stevens, a former banker, as he looks to modernise Australia’s largest exchange and fight off rivals. In recent years Canberra has relaxed rules on competition in the equities business, which has allowed, Chi-X Australia, a new entrant, to take a 12 per cent market share, according to data from Fidessa.
Brokers were critical of what they perceived as a lack of information from the ASX, and investors were quick to contrast it with rivals. “The interesting thing is that Chi-X stayed open all the way through,” said Simon Twiss, a partner and dealer at Arnhem Investment Management, a Sydney-based fund manager.
Nevertheless, he noted that it although Chi-X did pick up some extra business, some brokers were reluctant to switch their trades to a rival that lacked the depth and liquidity of the primary market.
Still, Chi-X reported a total market share of 21.4 per cent and value of A$146m, compared with more regular levels of about 13 per cent.
That’s roughly five times the $1.1bn of shares that changed hands in Monday’s truncated session, noted Macquarie Securities.
ASX is looking to upgrade its settlement systems this year and is exploring using blockchain — the technology behind cryptocurrency bitcoin. Separately on Monday, the exchange sent out a consultation paper to market participants to discuss its plans to upgrade the country’s main post-trade equities settlement system, known as Chess.
Mr Stevens took over on August 1, with Rick Holliday-Smith, the company’s chairman, saying soon after that “financial markets, technology and strategy have been the keystones of his career”.
He replaced Elmer Funke Kupper, who stood down this year owing to his former employer, Tabcorp — a gaming company of which he was in charge — becoming the subject of a police investigation into allegations of foreign bribery and corruption.
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