• Kyodo

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The Tokyo bourse operator has compiled a report to submit to the Financial Services Agency explaining the cause of a full-day outage earlier this month and the preventive measures it has since formulated, sources close to the matter said Friday.

The Tokyo Stock Exchange, run by Japan Exchange Group Inc., said the memory capability of a server in its trading system stopped functioning and its auto-backup system also failed due to a settings error.

The bourse suspended all trading Oct. 1, the only time such an incident has occurred since 1999 when its trading system was fully computerized.

The bourse detected a hardware defect at 7:04 a.m. on Oct. 1 and announced it would suspend all trading at 8:39 a.m. ahead of the market's opening. At 11:45 a.m., soon after failing to get trading underway in the morning session, the TSE said it would halt operations for the entire day.

The bourse said it decided not to resume trading as it could cause further disruption to market participants. Even though the malfunctioning hardware was able to be manually switched to its backup, the resumption required an entire system reboot that would affect orders that had already been placed, the TSE said.

The report is believed to outline measures such as the need to create rules with securities houses on how to resume trading after such an incident, the sources said. The bourse resumed normal trading Oct. 2.

The TSE said earlier that it had no intention to seek compensation from Fujitsu Ltd., the developer of its trading system, as the bourse is responsible for market operations.

The FSA is expected to consider issuing administrative orders, if necessary, based on the report.

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