• Kyodo


Finance Minister Taro Aso said Tuesday the financial authorities will take appropriate steps to prevent a recurrence of the Tokyo Stock Exchange's full-day outage earlier in the month.

The Financial Services Agency plans an on-site inspection of the exchange with an eye on issuing an operation improvement order, sources familiar with the matter have said, after the bourse reported details of the glitch to the watchdog while pledging to launch an overhaul of its trading system and carry out a drill to ensure that a backup system works properly.

"We're in the middle of examining" the stock exchange's report, Aso said during a news conference.

"First and foremost, a recurrence (of trading outages) must be prevented. We will appropriately respond to the matter from that perspective," Aso said without specifically referring to an expected FSA inspection.

Chief Cabinet Secretary Katsunobu Kato declined to comment on an administrative response at a separate news conference.

The Tokyo bourse said Monday it plans an overhaul of its system that failed to switch to a backup system following a glitch on Oct. 1, causing a full-day suspension of trading in all listed stocks that day.

The exchange's operator is setting up a panel aimed at creating new rules on how to resume trading in the wake of a suspension.

The panel will consist of various market participants including securities houses, investors and system vendors. The first round of discussions will be held by the end of this month with the aim of creating new rules by the end of March.

The bourse has said it and securities companies will hold drills for switching to a backup system in the event of a serious technical failure.

It was the first time the bourse had suspended trading of all listed stocks for an entire day since its trading system was fully computerized in 1999. It resumed normal trading the following day.

The bourse 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. It said the setting was altered in 2015 when the trading system was updated, but the change was not reflected in its manual.

"Problems were found not only in the systems but also in operations, including criteria and steps toward trading resumption," TSE Executive Officer Kawai Hiroki said during a news conference on Monday.

The TSE and its operator Japan Exchange Group Inc. submitted a report Friday on the cause of its system failure and preventive measures to the FSA.

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