The Market Monitor Minding the Nation's Business
The Philippine Stock Exchange Inc. (PSE) said it has strengthened its technology systems and business continuity processes to prevent a repeat of the glitch that resulted in the disruption of trade on two consecutive days.
The PSE provided the market with updates on its preliminary findings on the events that caused the Exchange to impose a temporary halt in the trading of listed equities in the market on August 24 and August 25.
The trading halt on August 24 was imposed at 2:05 pm after the PSE front end trading terminals were determined to be experiencing market data transmission issues.
The immediate resolution made at that time, as recommended by the system provider, was to free up the load capacity in the servers.
This was done by eliminating the inactive connections to the server and refreshing the market data information in preparation for the resumption of trading, the bourse operator said in a statement.
The trading halt was lifted at 2:50 pm. Following the close of trading, additional virtual servers and dedicated market data servers were installed.
On August 25, a trading halt was implemented at 10:02 am when the same trading terminals encountered similar data transmission problems.
The PSE said it subsequently installed and configured additional physical servers and loaded market data into the new servers.
At 2:02 pm, PSE’s operations group sent out log-in instructions to trading participants in preparation for the resumption of the market at 2:55 pm.
After close of trading, the PSE added physical servers and disabled the virtual servers.
As with the August 24 incident, only when the data transmission issue was addressed did the Exchange lift the trading halt.
The primary technical issue identified pertained to the transmission of market data to the PSE front end trading terminals.
A significant number of terminals, deployed to trading participants in both Ayala and Tektite trading floors as well as those that have offices offsite who have chosen to use this platform, were not receiving market information in a timely manner.
In both cases, the PSE observed the load capacity of the market data servers feeding to the front end trading terminals at full utilization.
The number of messages being inputted in the servers spiked on both days given the heightened activity in the market.
On both the August 24 and 25 trading days, no issues were encountered in the transmission of market data to platforms that connected directly to the ITCH data feed or the market data feed coming directly from the NASDAQ engine or the PSETrade XTS.
Since then, the PSE has not encountered the same issue and the market data server utilization has been under control.
The preliminary review was conducted in consultation with the system providers of the PSE particularly the developer of the front end trading terminal where the technical issue was detected.
The results are preliminary and the Exchange continues its investigation to validate its findings, the PSE statement read.
While the event is technical in nature, the Exchange recognized that such trading disruptions need to be addressed with a holistic perspective.
As such, the PSE said it will also review its relevant policies and procedures to identify ways to enhance its issue resolution protocols.
The PSE said its decision to halt the market was necessary and deemed in the best interest of the public to maintain a fair and orderly market. It was not imposed to stem the market’s drop, it added.
There were also no indications that the technical problem was in any way related to cyber security issues.
The PSE deeply regrets the events that made it necessary to halt trading in the market and fully recognizes the need to implement measures immediately to address the technical issues it encountered, the PSE said.