Avery Chen
Hong Kong Exchanges and Clearing (0388) says the trading suspension of the derivatives market last September was due to an isolated software issue in the vendor-supplied system.
That was the first time the bourse operator had halted derivatives trading.
On September 5, 2019, most futures and options exchange players found their systems were not operating normally, as connections to the Hong Kong Futures Automatic Trading System were interrupted.
The disconnections were caused by an erroneous logic in a vendor-supplied matching engine partition, said the HKEx incident report.
After testing and verification of the interim solution recommended by the software vendor, trading resumed on September 6.
HKEx said it formed a subcommittee to oversee the investigation, review and implementation of the enhancement plan. The report was submitted to the Securities and Futures Commission.
HKEx has deployed a permanent fix to the combination order of two-sided price quote, the software that caused the malfunction, following testing and completion of a market practice session with the vendor.
It has implemented enhancement measures, which focus on incident prevention, detection and handling, mitigation of incident impact, and communication during incidents.
In other news, the Insurance Authority said it will submit group capital rules to lawmakers for scrutiny, which is expected to be effective in the first quarter. The rules are aimed at setting out requirements on capital, regulatory reporting and public disclosure that apply to a holding company in relation to its insurance group.
