Tokyo Stock Exchange falters as IT problems return

The Tokyo Stock Exchange (TSE) suffered its second major systems outage this year on Tuesday (August 7th), suspending derivatives trading for over an hour and striking another blow to the capital’s reputation as a global financial centre.

There’s little publicly-available information about the incident, which knocked trading offline for 95 minutes, except that the trading halt began at 9:22am after s “system failure” occurred four minutes earlier.

The TSE posted the following grovelling message the day after:

We deeply apologise to our market users and related parties for any inconvenience which may have been caused by yesterday's trading halt. All derivatives contracts will soon start trading as per usual today.

Hiroki Kawai, director of information technology planning and corporate strategy at TSE, claimed that the first computer glitch occurred in the Tdex+ system used for derivatives, although its cause is still unknown, Bloomberg reported.

Compounding the problem, automatic activation of back-up systems apparently failed – the same problem which took the TSE down in February in one of its worst outages in recent years.

The outage is a blow to the TSE ahead of its merger with domestic rival the Osaka Securities Exchange announced last November and is doubly ironic considering that IT cost savings from consolidating the two platforms was apparently given as a reason for the deal.

Japan is not alone in experiencing costly outages at its trading centres, however.

On Monday, Spanish equities trading was disrupted for four hours after a glitch at operator Bolsas y Mercados Espanoles SA.

Last week, a dodgy algorithm affecting over 100 trades was blamed for US$440m in losses at Knight Capital Group. ®