MAS unleashes scathing rebuke against SGX after back-to-back market outages

The bourse will shell out $20m to boost systems.

Singapore’s central bank yesterday issued a scathing rebuke against the Singapore Exchange for back-to-back market outages that hit the local bourse in November and December.

“MAS determined that while SGX has met its primary obligation as an exchange to maintain fair, orderly and transparent markets, it has fallen below service recovery standards on both incidents,” the Monetary Authority of Singapore said in a statement.

To make up for these lapses, the MAS has instructed the SGX to invest $20m to boost its systems.

The SGX will need to strengthen its monitoring system capabilities to allow timely and accurate problem identification when incidents occur, improve its business continuity management and disaster recovery procedures to improve crisis preparedness, and boost its crisis communications processes to provide prompt information to all stakeholders.

“MAS accepts the assessment of the SGX Board Committee of Inquiry that SGX had taken reasonable steps as a market operator to ensure that its power system was resilient. However, MAS is of the view that SGX’s service recovery requires improvements,” the MAS stressed.

The central bank has also imposed a moratorium on fee increases for the securities and derivatives markets with immediate effect until the improvements are completed.

The MAS has also instructed the SGX to contribute $1 million to its Investor Education Fund.