September 20 2016

elb2In Today’s Exchange Invest

 

The Antipodes may not be at the epicentre of the planet but they are the focal point for much of the parish today as the ASX meltdown creates huge pressure on the Victorian monopoly to reform… The downside is not merely their loss, the risk is the strangulation of Australia’s capital market structure.

 

Meanwhile, rumours that even deploying a pair of bean cans and a length of string  to produce a primitive communications device would require a lengthy programme of agile development amidst the ASX tech team could not be confirmed as we raced to pixel.

 

However, the greater issue now is that those denizens of technological archeology, ASIC (rumour has it they still run some Windows 95 devices), are now waving fingers and looking stern. Then again there is grounds for optimism. The ASX has now clearly and openly evidenced internal incompetence which raises many questions about the capacity of management from various angles. That hopefully helps push forward the arguments for further enabling a new genuinely competitive playing field for Australian markets.

 

Public Markets

ASX Faces ASIC Probe After Technical Glitch Hits Trading
Exchange To Overhaul Clearing
Tech Failure As ASX Seeks Input On CHESS Endgame
The Australian
Statement From ASIC Regarding Yesterday’s Securities Markets Trading
MondoVisione

 

PLY: This appeared from the ASX media team before the Australian market opened today:

 

Market Notices from ASX’s Trading Operations

 

ASX confirms that the issue that occurred yesterday has been resolved and ASX overnight processing has completed normally.

 

Participants have been able to connect from 2:25 am and all systems are performing as expected.

 

Equity markets will transition through their normal sessions starts starting with PRE_OPEN at 7:00am.

 

Participants are able to complete their normal recovery process and query their firm order book (MQ151 Query) from the time they connect. Participants will also be able to query all trades from the previous trading day using a CQ111 query. For further information please refer to section 4.8, paragraph 8 on page 25 of the ASX Open Interface Manual.

 

ASX can provide, on request, a file with ASX last trade prices for trade date 19thSeptember.

 

For further information on the issue that occurred on Monday please refer to the market notice that has been released. A copy of the Market Notice can be found here.

ASX Trade Outage – 19 September 2016:

 

On 19 September 2016, ASX experienced a technical issue that prevented the market from opening at its scheduled time of 10am. The primary issue arose from a hardware failure in the main database used by the equities trading system, ASX Trade.

 

This had a number of knock-on consequences throughout the day that impacted the proper functioning of the trading platform and the operation of the market.  These included a delay to the market open and the decision to close the market early.

 

Participants and the market more broadly were updated throughout the course of the day.  This included regular communication via the trading platform, telephone, email, social media and the ASX website.

 

ASX is continuing to investigate the root cause of the issue. A full detailed incident report will be provided to Participants later this week. ASX will also schedule a customer forum next week to discuss the operational impacts, the communication process, and preventative actions.

 

The trading platform will be available as normal on Tuesday 20th September.

A high level summary of what happened is set out below.

  1. At 9.45am ASX announced the market would not open on schedule and was placed into Enquire.  This followed ASX and a number of Participants having experienced issues accessing securities information on the trading platform.
  2. At 10:54am, ASX announced that the market would be placed in Pre-Open at 11.10am with a staggered opening commencing at 11.30am.
  3. Groups 1-3 (securities in the alphabet range A-M) transitioned into Pre-Open and Open as expected.
  4. Due to an operational error, the opening of Group 4 (securities N-R) and Group 5 (securities S-Z) were impacted.
  5. Group 4 incorrectly opened at 11.10am and remained open for a brief period during which time a number of trades occurred. All trades during this period were cancelled. Group 4 was placed into Enquire at 11:11am, and after ASX had communicated with all Participants impacted by the cancellations, was placed in Pre-Open at 1.00pm and Open at 1.20pm.
  6. Group 5 did not open as advised and was rescheduled to Pre-Open at 11.40am and Open at 12pm.
  7. Between approximately 11.30am-11:40am a number of customers were not receiving trade confirmations on a subset of securities.  This issue was resolved at 11:41am.
  8. The market operated as normal until approximately 1.43pm, when the trading platform experienced a secondary issue that meant that trading was not available for a subset of securities.
  9. At 2.05pm ASX placed the entire market back into Enquire.
  10. At 3.35pm ASX announced that the market would not re-open and that there would be no CSPA.
  11. At 5.20pm ASX announced that closing prices were determined to be the last price traded on the ASX market.”

 

Worst Australia Stock Outage Since 2011 Has CEO Saying Sorry
Bloomberg

 

PLY: That even Australian multi-cultural tv channel SBS has devoted space (which could have contained stories of Ruritanian yak farmers fighting for gender identity) to the ASX tech meltdown demonstrates just how big a story this particular meltdown is. (And no it won’t be forgotten in a heartbeat: this time it is different, this was the final symptom of something building a head of steam for some time).

 

True, there was a similar incident in the early stages of the EFK dynasty but the world has moved on. ASX is no longer a lonely monopolist. Chi-X in particular has mounted a spirited and sustained campaign to garner market share. Ultimately the concern now is that ASX maintains too many levers of control on the market structure. Thus it can close the market when it is suffering a self-inflicted crisis…although others could maintain, well, a market. Even ASIC (whose default position often appears to be as defender of the ASX) pointed out tartly in their “ASX: pull your socks up” statement:

 

“We note that Chi-X did provide a trading venue for ASX shares from 11:30am yesterday.”

 

This is a lot more than just one dire day where an outbreak of adversity has raised more questions than answers about both the Australian market structure but also the very functioning of the ASX’s operations.

 

Once the envy of the parish world-wide, this is a very very dark time for the ASX tech team.

 

The ASX’s Terrible Day In 7 Tweets Of Chaos
Business Insider Australia

 

PLY: #Ouch

 

ICE Clear Europe Receives EMIR Authorisation
MondoVisione

 

PLY: Finally! ICE Clear Europe is regulated by ESMA, last of the major EU CCPs.

 

LME: No Plans For Further Fee Cuts
BR-epaper – Business Recorder

 

…after announcing lower charges for short-dated trades last month.

 

Private Markets

Straits Financial Group Obtains Operating License to Set Up Physical Commodity Exchange in Indonesia
Yahoo Finance

 

The Physical Exchange will be branded separately as Asia Commodity Marketplace (“ACM”).

 

Irish Stock Exchange Pre-Budget Submission – Tax Changes Needed To Encourage Irish Businesses To Scale
Exchange News Direct

 

PLY: Corporation tax is great but the ability for Irish folk to really make progress to scale is deeply disincentivised in what remains a Dickensian tax system. Moreover the stamp duty is an impediment to savers and investors.

 

Special Section: FTI, NSEL, India at the Crossroads

PLY:MCX up 2%, FTIL down 1%.

 

FTIL Moves Court Against ‘Possible’ Attachment Of Assets By ED
Livemint

 

Technology

TOCOM New System Goes Live Today
MondoVisione

 

PLY: Good luck to TOCOM which has launched their new trading and clearing system residing on J-GATE and the JPX Clearing System, (both operated by Japan Exchange Group (JPX)).

 

Bombay SE Collaborates With Twitter To Provide Real-Time Stock Update
International Business Times, India Edition

 

PLY: Interesting development.

 

CUSIP Global Services Teams With Delaware Depository To Create Industry’s First Standardized Security Identifiers For Gold Bars – First-Of-Its-Kind Initiative Critical To Modernization Of Precious Metals Market
MondoVisione

 

Lombard Risk Strikes Margin Calculation Partnership With TMX
Finextra

 

New Blockchain Research Alliance Establishes In Shanghai
EconoTimes

 

In April, Bai Shuo, former chief engineer of the Shanghai Stock Exchange, announced the establishment of ChinaLedger…

 

Products

Exchanges Fail To Lure Swaps From OTC Market: BIS
International Financing Review
No Growth For On-Exchange Derivatives – BIS
FOW magazine

 

PLY: I doubt the next deregulatory wave will involve pushing back on the OTC to ETD wave but this was never going to play out as rapidly as many seem to have thought – especially not during an era of ‘funny money’ central banking deviating from normal fiscal rectitude.

 

Bursa Malaysia Derivatives Launch The Enhanced 3-Year, 5-Year And 10-Year Malaysian Government Securities Futures Contract
MondoVisione

 

EEX Exchange Council Approves Plans For Floor Future Launch
MondoVisione

 

PLY: NB In the context of caps…no new trading floor being mooted, just a floor for prices.

Indexes

TMX Group Statement Regarding Index Inclusion
MondoVisione

 

Career Paths

 

The Sydney Stock Exchange has appointed former senior ANZ banker Tony Sacreas CEO. The SSX Deputy Chairman George Wang will now step back as an executive director to become non-executive.

 

The LSE Business Services division (LSEG BSL) in Sri Lanka has completed the first stage of employment…filling 100 tech jobs in Sri Lanka (source: Lanka Business Online).

 

At the FINRA AGM in Washington DC:

 

Bob Muh, CEO, Sutter Securities, Inc. was elected as a Small Firm Governor. The Nominating Committee nominated and the Board appointed two new public governors:

  • Eileen Murray, co-CEO of Bridgewater Associates
  • Hillary Sale, Walters D. Coles Professor of Law at Washington University in St. Louis Law School

 

In addition, the following four public governors were appointed to second terms:

  • Rochelle B. Lazarus, Chairman Emeritus, Ogilvy & Mather
  • Brigitte C. Madrian, Aetna Professor of Public Policy and Corporate Management at the Harvard Kennedy School of Government
  • Leslie F. Seidman, Former Chairman, FASB
  • Luis M. Viceira, George E. Bates Professor at the Harvard Business School and Senior Associate Dean for International Development

 

Crowdfunding

BNP Paribas Extends Crowdfunding Blockchain Programme
Finextra (press release)

 

BNP Paribas Securities Services is expanding its blockchain platform for private stocks to help private companies issue minibonds via crowdfunding.

 

Here’s Why Structured Investment Platforms Are The Need Of The Hour For Ailing Indian Startups
Businessinsider India
Other Stories

Bitcoin Is Money, US Judge Says In Case Tied To JPMorgan Hack
Reuters

 

Fintech – The Next Frontier For Hong Kong’s ‘Battle’ With Singapore?
South China Morning Post

 

Perennial “frenemies” Singapore and Hong Kong have never shied away…

 

The First Lady Effect
Huffington Post

 

At 24, she worked as a listings assistant at the Namibian Stock Exchange to help fund her legal studies…

 

PLY: Former exchange parishioner Her Excellency Monica Geingos bears a diverse mix of titles, including First Lady of the Republic of Namibia.

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