Singapore's small, mid-cap companies association calls for independent probe into disruptions

THE Small and Middle Capitalisation Companies Association (SMCCA) has asked for an independent inquiry into recent disruptions of the Singapore stock market following Wednesday's delayed market open.

Wednesday's delay, the result of a glitch introduced after a weekend software update that affected the client accounting systems hosted by the Singapore Exchange (SGX), was the second major breakdown in a month. A committee comprising independent directors of SGX has been created to look into the circumstances surrounding the earlier shutdown, which closed the Singapore stock and derivatives markets for an afternoon on Nov 5.

But the SMCCA said SGX directors should not be running the probe.

"I think it is necessary to elevate this Inquiry Commission to one that is totally independent of SGX," SMCCA president Tan Choon Wee said in a statement. "We should include the necessary subject matter experts as well as have representation from the regulatory bodies. This is the best way to establish the root of the operational failures and to ensure we do not get further trading disruptions. It is critical to Singapore's reputation as a financial hub that these two incidents remain isolated one-offs."

SGX has drawn sharp criticism for the latest glitch.

The Monetary Authority of Singapore said the delay was "unacceptable" and warned that it could take supervisory action against SGX if necessary.

"MAS has registered its disappointment and concerns with SGX over the delayed opening of its securities market caused by a software defect," an MAS spokesman said in a statement. "The lapse is unacceptable, coming within weeks of the recent power breakdown on Nov 5. MAS has instructed SGX board and CEO to do a thorough review to address the shortcomings that led to the lapse. MAS will not hesitate to take supervisory actions against SGX if necessary."

SGX chief executive Magnus Bocker issued a public apology. "We sincerely apologise to all our securities members and their customers for the inconvenience caused by the delay in market open this morning," Mr Bocker said in a statement.

"We are very appreciative of the continuous support and close cooperation rendered by our members throughout the resolution process. This incident has occurred on the back of the power breakdown on Nov 5 and we understand the market's frustration. This should not have happened and we take full responsibility. We are reviewing our processes to prevent any recurrence. Our priority is in rebuilding the trust that our members and customers have in us, and we seek their understanding and patience."