MAS directs SGX to enhance recovery processes, operation resilience

SGX, in consultation with the MAS, has formed an Industry Working Group (IWG) to study and make recommendations on SGX's and industry participants' processes.
SGX, in consultation with the MAS, has formed an Industry Working Group (IWG) to study and make recommendations on SGX's and industry participants' processes.PHOTO: ST FILE

SINGAPORE - The Monetary Authority of Singapore (MAS) has directed the Singapore Exchange (SGX) to implement measures to enhance its recovery processes and operational resilience, after an investigation into a trading disruption that occurred in July last year.

The MAS said in a statement on Monday (March 20) that while SGX 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 the MAS.

"MAS notes that SGX has taken steps since the incident to address the hardware and software errors which led to the trading disruption," it added.

 

SGX had also, in consultation with the MAS, formed an Industry Working Group (IWG) to study and make recommendations on SGX's and industry participants' processes to enhance the operational resiliency of the securities market.

The MAS has accepted the IWG's recommendations and directed SGX to complete the implementation of these recommendations within 24 months.

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

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

Mr Ong Chong Tee, deputy managing director of financial supervision at MAS, said: "MAS 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. 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."