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MAS directs SGX to improve processes following trading disruption last year

MAS directs SGX to improve processes following trading disruption last year

SINGAPORE: The Monetary Authority of Singapore (MAS) directed the Singapore Exchange (SGX) to implement measures to enhance its recovery processes and operational resilience.

This is following supervisory investigation into the trading disruption to the securities market on July 14, 2016.

These measures included recommendations by the Industry Working Group (IWG), comprising SGX and industry stakeholders.

In a statement on Monday, MAS’ deputy managing director (financial supervision) Ong Chong Tee, said the authority took a serious view of trading disruptions.

SGX has taken steps since the incident to address the hardware and software errors which led to the trading disruption.

“Both SGX and brokerage firms have a shared responsibility to establish clear processes for timely recovery of our securities market in the event of an incident,” Ong said.

SGX will contribute S$1.5mil to co-fund the costs that may be incurred by brokerage firms to implement the IWG measures.

MAS has determined that while SGX has met its primary obligation as an exchange to maintain fair, orderly and transparent markets, it did not restore the proper functioning of its critical system within four hours as required by MAS.

SGX had also, in consultation with MAS, formed the IWG to study and make recommendations on SGX’s and industry participants’ processes to enhance the operational resiliency of the securities market.

The implementation of these recommendations will involve changes to the systems and processes of both SGX and the brokerage firms.

Meanwhile, following the Nov 5, and Dec 3, 2014 trading outages, MAS required SGX to make improvements to address the lapses related to those outages.