The Australian stock market ground to a halt yesterday after the nation’s main exchange, the ASX, was forced offline after a botched software update corrupted data feeds.
After just 20 minutes of trading on Monday morning, the exchange was shut down with a series of updates promising services would be restored as soon as possible.
Eventually at 2.58pm, an hour before the normal close of trading, the ASX surrendered with an announcement the bourse would re-open at 10am the following morning.
The exchange successfully opened as scheduled on Tuesday with all systems reported to be working normally.
On a typical day, the ASX would process around 1.5m equity trades, however yesterday only 108,000 were carried out before transactions were stopped.
In a public statement on Monday, the ASX put the blame on a software upgrade, saying “a software issue limited to the trading of multiple securities in a single order (combination trading) created inaccurate market data. The issue will be resolved overnight with the market re-opening at 10am tomorrow.”
“Today was the go-live for the refreshed ASX Trade system, which is the trading platform for ASX’s equity market. ASX, our technology provider Nasdaq, customers and independent specialist third parties conducted extensive testing for over a year, including four dress rehearsals, in preparation for today’s go-live. The refresh is the latest generation of a Nasdaq-developed trading system used around the world.”
Dominic Stevens, the exchange’s Managing Director and CEO, added “ASX is very disappointed with today’s outage and sorry for the disruption caused to investors, customers and other market users.
“The outage falls short of the high standards we set ourselves and the standards others expect of us.
“Notwithstanding the extensive testing and rehearsals, and the involvement of our technology provider, ASX accepts responsibility. The obligation to get this right and provide a reliable and resilient trading system for the market rests with us."
ASX adopted the US Nasdaq software in 2016 as part of its technology refresh which saw the exchange explore the use of blockchain to replace its aging CHESS clearing system, a project that was put on hold a year later. Currently ASX is forecasting CHESS, developed in the 1990s, will be replaced in April 2023.
Monday's outage comes three months after the New Zealand Stock Exchange was crippled for three days by a denial of service attack. There are no claims the ASX outage was due to malicious actors.
The corporate regulator however, was less than impressed. In an official statement on the outage, ASIC grumbled about ASX’s reliance on outsourced services and made a pointed reference to the competing stock exchange, Chi-X.
“Market licensees are required to operate a market that, to the extent reasonably practicable, is fair, orderly and transparent, and to have sufficient resources (financial, technological and human) to operate the market, including for any outsourced services,” the regulator wrote.
“Following the reopening of the market, ASIC will determine whether ASX followed the relevant regulatory requirements under the Corporations Act and met its obligations under its Australian Market Licence.
“In addition to ASIC’s expectations that this outage will be resolved as soon as is possible in a safe manner, ASX will be required to provide a full incident report to ASIC.
“We note that the Chi-X market remained open for participants to trade ASX listed equities, as well as Chi-X quoted ETFs and TraCRs.”