This time, it is the turn of HKEx. Why are the global stock exchanges down?

category:Finance
 This time, it is the turn of HKEx. Why are the global stock exchanges down?


Frequent failures of global exchanges

Of course, compared with the previous failures of global exchanges this year, the Hong Kong Stock Exchanges problems do not seem to be big enough.

On November 16, the Australian Stock Exchange was forced to close for a day because of a trading system failure. It is reported that this new trading system is provided by Nasdaq. The failure of the day caused inaccurate market data in a single transaction, disrupting the opening of the market. The ASX said Nasdaq, users and independent professional third parties had conducted extensive testing of the software for more than a year, including four Operational rehearsals. The suspension of the stock exchange has also made many investors very dissatisfied, and there has been a lot of criticism on social media such as twitter. Subsequently, the Australian Securities and Investment Commission (ASIC) has started a dialogue with the Australian Stock Exchange, investors, traders and other relevant departments to ensure the normal operation of the Australian Stock Exchange.

On October 19, the Euronext, the operator of Europes largest stock exchange, suffered a technical failure, which forced several European stock exchanges to suspend trading for more than two hours, the largest trading suspension in the past two years. Affected by this, after the resumption of trading, European stock markets once fell in a panic, dragging down the decline of European and American stock markets. A Euronext spokesman said the trading failure was mainly caused by a technical failure in a system responsible for managing data persistence.

The Tokyo Stock Exchange outage in October was even more famous. The worlds third-largest stock exchange had to suspend trading for a full day on the first trading day of October due to a system technical failure, triggering the worst technical failure in the history of the Japanese stock exchange.

The TSE apologized that the system did not immediately switch to the backup system in case of a failure. What is surprising is that the stock trading system used by the Tokyo Stock Exchange was designed and developed by Fujitsu company of Japan. The technology was updated in November last year, but there are still technical failures in the short term. According to the analysis of some institutions, the technical failure is likely to occur in the hardware system, that is, during the process of upgrading the technology before, expanding the product cluster and increasing the number of matchmaking engines, some data transmission errors occurred when different financial products were forwarded to different matchmaking product clusters due to the error of hardware construction. The good news is that if this happened the previous trading day, before the US presidential debate, it would cause market turbulence and investors would lose the chance to trade short-term based on the performance of candidates.

Four months later, the New Zealand stock exchange was forced to shut down due to hacker attacks for five consecutive trading days; in February this year, the worlds eighth largest stock exchange, the Toronto Stock Exchange, once announced the suspension of stock trading due to technical problems with order system.

The London Stock Exchange is not as lucky as the Tokyo Stock Exchange. On August 16, 2019, trading service problems led to the postponement of the opening of some large cap stocks in the London Stock Exchange, including the FTSE 100 and FTSE 250 indexes. The constituent stocks of these two benchmark stock indexes include HSBC, BP and AstraZeneca. The problem comes at a time when markets are already bumpy - the UK is about to leave the EU, Global trade disputes, and market fears of recession have led to stock market volatility. Traders are also troubled: if the market falls or rebounds strongly and the LSE has not opened, then this is a terrible situation for active traders. At the same time, if futures maintain normal trading, but the stock index cannot quote normally, this will lead to futures traders losing reference. The above macro traders told reporters.

It is urgent to increase technology investment

Major institutions have said that many stock exchanges have had technology-related problems since this year, which shows that the situation of under investment in IT technology has become quite prominent.

A financial technology company familiar with the technical system of the stock exchange frankly said that in order to prevent the stock exchange from falling into the dilemma of technical failure and trading suspension again, on the one hand, it is necessary for the exchange to increase its investment in it system and introduce the latest electronic trading system with high speed execution and high flexibility. On the other hand, it also needs the market maker advantages of the exchange and major securities companies The data interface standard is changed to avoid the new technical obstacle and data management failure caused by the inconsistency between the two data interface standards.

In fact, in recent years, the exchange has frequently expanded its territory through mergers and acquisitions in order to make up for the short board of IT technology system investment. For example, the Chicago Mercantile Exchange (CME) acquired NYMEX before. One important reason is that it highly recognized the ClearPort settlement system of NYMEX, which helps to improve the stability and processing efficiency of CMEs transaction settlement. When NYMEX introduces CME, it focuses on the CME lobex trading system of the latter, which enables its futures trading products to quickly realize 24-hour uninterrupted trading settlement; another example is that on October 9, this year, Euronext, together with Italian sovereign wealth fund and Intesa Sanpaolo bank, acquired Italian exchange from LSE for 4.325 billion euro. The purpose of this merger and acquisition is to help the pan European stock exchange in Europe The alliance has established a leading market infrastructure to promote the diversification of securities trading business portfolio and new asset classes through the establishment of listed and secondary markets and derivative financial bond markets. In the face of this series of actions, some people think that at present, many stock exchanges focus on the R & D and promotion of data products to obtain more diversified income, but ignore the infrastructure construction and maintenance of data management. As a result, a large amount of funds are invested in data applications, rather than data security and processing reliability. As a result, the probability of system downtime caused by hacker attacks on the stock exchange is increasing in recent years. Source of this article: Guo Chenqi, editor in charge of first finance and Economics_ NBJ9931

In fact, in recent years, the exchange has frequently expanded its territory through mergers and acquisitions in order to make up for the short board of IT technology system investment. For example, the Chicago Mercantile Exchange (CME) acquired NYMEX before. One important reason is that it highly recognized the ClearPort settlement system of NYMEX, which helps to improve the stability and processing efficiency of CMEs transaction settlement. When NYMEX introduces CME, it focuses on the CME lobex trading system of the latter, which enables its futures trading products to quickly realize 24-hour uninterrupted trading settlement; another example is that on October 9, this year, Euronext, together with Italian sovereign wealth fund and Intesa Sanpaolo bank, acquired Italian exchange from LSE for 4.325 billion euro. The purpose of this merger and acquisition is to help the pan European stock exchange in Europe The alliance has established a leading market infrastructure to promote the diversification of securities trading business portfolio and new asset classes through the establishment of listed and secondary markets and derivative financial bond markets.

In the face of this series of actions, some people think that at present, many stock exchanges focus on the R & D and promotion of data products to obtain more diversified income, but ignore the infrastructure construction and maintenance of data management. As a result, a large amount of funds are invested in data applications, rather than data security and processing reliability. As a result, the probability of system downtime caused by hacker attacks on the stock exchange is increasing in recent years.