Delay to Singapore Exchange derivatives trading is latest in string of disruptions

The reception of the Singapore Exchange headquarters. SGX suffered another market disruption in Futures delay on Thursday (Dec 8).
The reception of the Singapore Exchange headquarters. SGX suffered another market disruption in Futures delay on Thursday (Dec 8).PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG) - The opening of derivatives trading in Singapore was delayed on Thursday (Dec 8), at least the fourth disruption to occur on the Republic's bourse and associated markets in the past 18 months.

Futures on the Nikkei 225 Stock Average, which usually start trading at 7.30 am local time, began changing hands at about 10.15 am, according to data compiled by Bloomberg. The contract is one of the most popular SGX, with 133,000 of the December futures changing hands on the venue on Wednesday. The delay also affected India's Nifty 50 Index Futures, which usually start trading at 9 am local time, and iron ore contracts, Bloomberg data show.

The Singapore Exchange (SGX) said in a statement sent at 10.23 am that all trading on its derivatives markets was normal. It did not provide further details.

SGX has had a number of technical issues hit its markets in recent years. In July, the exchange halted stock trading mid-morning and failed to reopen for the rest of the day, despite two pledges to do so. Chief Executive Officer Loh Boon Chye apologised for that malfunction, which came on the one-year anniversary of his accession as CEO. His predecessor Magnus Bocker issued a public apology in the wake of two trading disruptions in the space of a month. Those mishaps led to a reprimand from the Monetary Authority of Singapore.

The exchange operator's recent technical malfunctions also include a near two-hour disruption in derivatives trading in August 2015 and a one-hour halt in October 2015. MAS' acceptable maximum unscheduled downtime for financial institutions is four hours in any 12-month period.

 

SGX in September formed a committee to look at ways to improve the operational resiliency of its markets after the July malfunction.

"It's not unusual for a technical glitch to happen," said Mr David Gerald, president of the Securities Investors Association of Singapore, an industry group representing shareholders. "What's important is that we've got to recover quickly and ensure that the market functions and trading is orderly."

He is a member of the committee reviewing SGX's back-up systems and processes.