Q53: To ask the Senior Minister if he will explain the reasons for the recent complaints about the Singapore Exchange (SGX) IT systems, including the (i) slow service at the SGX website; and (ii) sudden reversion to the old SESOPS system from the new SGXTrade after just two months; and what measures have been taken to resolve the problem.
Mr Tharman Shanmugaratnam, Minister for Education and Deputy Chairman:
Slow Service at the SGX Website 1. As with all Internet websites, users may experience slow access on the SGX website if there is a large number of users at the same time. In the case of SGX, almost all public interest is directed at the "live" stock prices and corporate announcements, with the greatest bandwidth consumption coming from the viewing of "live" stock prices. Users typically generate successive requests, often non-stop, for information updates in order to get the latest prices and news.
2. Over the past eight months, SGX has almost doubled its Internet bandwidth to address the high demand for "live" stock prices. Two months ago, SGX separated its Internet bandwidth into two channels so that the public accessing "live" stock prices will not have to compete with those accessing corporate announcements. This was to ensure that the public is able to access corporate disclosures in a timely manner.
3. SGX plans to make further improvements to its IT systems and infrastructure. SGX is also evaluating options on how to serve the needs of different customer segments better - from occasional users to heavy users. Beside the SGX website, investors can also obtain market information from alternative channels such as Teletext, Internet trading sites and data service vendors like Bloomberg and Reuters.
Implementation of SGXTrade 4. The SGXTrade initiative forms part of SGX's business objective to offer more sophisticated trading capabilities to market participants. The current system, SESOPS, is a 16-year-old system that is becoming obsolete. SGX decided to work with participating broking houses, in a commercial relationship, to offer SGXTrade as a replacement solution to SESOPS. While some broking firms decided to develop their own trading solutions, 11 chose to adopt SGXTrade.
5. SGXTrade was rolled out on 19 August. In mid-October, SGXTrade started to experience intermittent outages. To avoid any potential adverse impact on customers, brokers were offered the option to switch back to SESOPS, with most taking up this offer. SGX is working to diagnose and rectify the problems identified. After SGXTrades robustness has been improved, the system will be re-introduced.
6. As the operator of the key exchange in Singapore, SGX has to ensure that its trading platforms and infrastructure operate safely, efficiently and reliably. MAS will continue to monitor the measures taken by SGX to ensure that the issues are resolved expediently and with minimal inconvenience to investors.