Let there be light when disruption strikes

THE power outage that shut down Singapore's stock and derivatives markets for half of Wednesday illuminated the need to help everyone see a little more clearly. For critics of the Singapore Exchange (SGX), the disruption needs to be viewed in perspective - one major stock market shutdown in years is no reason to start crowing about a loss of reputation or the end of the market as we know it.

For SGX, it needs to acknowledge that its communications to retail investors during the stoppage should have been better. The exchange was updating the brokers but retail investors and even many professional traders did not know when and if the market was going to reopen until late in the day. For the regulators, it may be timely to require greater accountability and transparency from market operators. For a start, it would be of great public benefit to maintain and make public statistics on downtime and other measures of operational continuity.

First, the alarmists. Some critics have been quick to slam the exchange for the outage, proclaiming that the episode calls into question SGX's status as a top-tier global exchange and damaging its reputation. Those sentiments may be hard to justify. Keep in mind that Wednesday was the longest disruption to the stock market since 2007, and even that earlier stoppage was due to glitches in an old system that SGX no longer uses. Other exchange-originated disruptions since that time were mostly annoying but not disastrous - the derivatives market had a delayed opening in 2013, and corporate announcements had what was essentially a day-long disruption earlier this year.