SGX stoppage inquiry takes step forward
Singapore
THE inquest into the trading breakdown at the Singapore Exchange (SGX) earlier in November has taken a step further, with the terms of reference set for the board committee of inquiry (BCOI), SGX said on Thursday.
The BCOI has been tasked to oversee investigations into the facts and circumstances leading to the breakdown on Nov 5, review the findings of the investigations, SGX's decision making process, incident management and responses, and communications with market participants and the general public. It will also recommend appropriate improvements to prevent recurrence and to enhance processes in crisis management, SGX said.
The BCOI held its first meeting on Nov 10. It has commenced the process of identifying and appointing independent experts, to advise the BCOI on the relevant technical, operational management and communications issues. These independent experts will report directly to the BCOI.
"The BCOI will keep the SGX board and the Monetary Authority of Singapore (MAS) apprised on the progress, investigation findings and outcome of its work, with MAS having direct access to the independent experts," said SGX.
The committee, announced earlier, comprises four SGX board directors who are all independent of management. The chairman is Quah Wee Ghee, while the other three are Chew Choon Seng, Kevin Kwok and Lee Hsien Yang. Mr Quah is the current chairman of SGX's risk management committee.
Under scrutiny is the cause of the power outage that disrupted trading in the bourse's securities and derivatives market for more than three hours. One area that will be studied closely is why SGX's back-up power supply, known as the uninterruptible power supply (UPS), did not kick in when it should have. A day after the incident, SGX had revealed that a malfunction in the UPS at the bourse's data centre caused the outage.
MAS has said that it takes the trading halt seriously and has already instructed SGX to take immediate measures to prevent a recurrence. The central bank added that it would not hesitate to take appropriate regulatory and supervisory actions against SGX should any lapses be uncovered in the investigations.
In earlier remarks, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that the incident "does not help" Singapore's reputation as a financial hub, even though similar incidents have happened in financial centres in other countries.
