Monetary Authority of Singapore reprimands SGX for market outages

The Monetary Authority of Singapore (MAS) has reprimanded Singapore Exchange (SGX) for lapses related to the market outages in 2014 and directed the exchange to improve its recovery capabilities and processes, said MAS in a news release Wednesday.

MAS will monitor closely SGX's implementation of the remedial measures. Until the measures are verified by an independent expert and MAS is satisfied with the completion of these measures, SGX will not increase fees for the securities and derivatives markets, said the authority in the statement.

MAS determined that while SGX has met its primary obligation as an exchange to maintain fair, orderly and transparent markets, it has fallen below service recovery standards on both trading disruption last year.

Following the discussion with MAS on the incidents, SGX has decided to contribute 1 million Singapore dollars to its Investor Education Fund.

SGX also said it accepted recommendations by its Board Committee of Inquiry to eliminate the root cause for the power outage and will invest 20 million Singapore dollars to improve and strengthen its technology infrastructure in their acceptance of full responsibility for the outage incident.

MAS has directed SGX to strengthen its monitoring system capabilities to allow timely and accurate problem identification, strengthen its management and recovery procedures to improve crisis preparedness and improve its crisis communications processes to provide prompt information to all stakeholders.

Trading on SGX was halted for nearly three hours on Nov. 5, 2014 following a technical glitch which resulted in the most severe disruption on the exchange in seven years.

Another outage on Dec. 3 last year delayed market opening to errors in reports generated by SGX's client accounting system, which were caused by technical changes performed during the weekend before the disruption. Endi