Tokyo Stock Exchange sets up panel to investigate outage

TOKYO • The Tokyo Stock Exchange (TSE) has appointed four external board members to a committee to investigate last week's trading outage as its system developer, Fujitsu, continues to examine the cause of the incident.

A hardware glitch paralysed trading in the world's third-largest equity market last Thursday, testing the exchange's credibility just as the country's new prime minister prioritises digitalisation.

The exchange said on Monday that the board members, including well-known lawyer Hideaki Kubori, would work to identify the cause of its worst system outage and explore measures to prevent such incidents in future.

The exchange, owned by Japan Exchange Group, said the system crash happened after a memory in one of its discs was physically broken and an automatic switch to a back-up system failed due to a fault in the settings.

"We are looking into why it was set up this way," director of trading systems at the exchange Yasuhiko Tamura told reporters.

The exchange has subsequently changed the settings in question and confirmed that the automatic switch-over now works, it said.

Mr Takahito Tokita, the chief executive of Fujitsu - the developer of the TSE's Arrowhead trading system - said the firm was still investigating the cause of the outage, which led to the first full-day suspension since the exchange switched to all-electronic trading in 1999.

"We will make utmost efforts to find the causes and prevent recurrences of such troubles," he said.

Arrowhead debuted in 2010, bringing processing times for trades to five milliseconds.

The system was overhauled in November, and currently processes orders in about 0.2 milliseconds.

Asked who was responsible for the system failure, Mr Tokita said it was too early to say because the investigation was still ongoing. He declined to comment further.

The TSE has said it has no plans at this point to ask Fujitsu for compensation.

Mr Tokita said Fujitsu had made no decision on the issue.

Mr Eiichiro Yanagawa, a Tokyo-based senior analyst at financial services tech consulting firm Celent, said: "From what we learnt through the press conference, Arrowhead doesn't need a major update right now except for the elimination of the single point of failure."

He added: "The challenge is how to reduce downtime."

REUTERS