Market not well advised during ASX outage: ASIC
- 24 May, 2013 10:12
The ASX Group should work on its communication skills with the market during technological outages, the Australian Securities and Investments Commission (ASIC) said in a report released today.
The ASX's market announcement platform, implemented June 2012 to increase automation of announcements, experienced an outage for three hours and 44 minutes on 9 October from 12:11pm to 3:55pm . During the outage, ASX officers could not process or release any announcements to the market. In total, 112 announcements were submitted but not released due to the outage.
Problems continued even after ASX switched MAP processing to a backup site in Bondi, about an hour into the outage. "This did not provide processing capability and it was discovered that the same problem was also present in the backup environment," ASIC said.
Three hours after the first interruption, it was discovered that a problem within a third-party database had caused a database memory failure, according to ASIC. A workaround was applied at 3:55pm while ASX tested a patch for the third-party database.
"Our view is that ASX Group handled the operational response to this issue in a satisfactory manner," said ASIC. However, the federal financial regulator questioned "the approach it took to keeping all market users adequately informed.”
While ASX contacted issuers that lodged an announcement during the outage, it did not advise other market participants until two hours after the outage occurred, according to ASIC. The ASX website was not updated with the issue until an hour after that, at 3:30pm, it said.
"We believe that these messages should be delivered to all affected market users at the same time," ASIC said. "In this case, we would have expected ASX Group to provide details of the issue to all market users at the same time through its Voiceline service, system status and public website.
"We recognise that a market operator should be given an opportunity to address a system issue, including attempting to revert to a backup site,” it said. “This needs to be balanced against advising the market of a system issue and the interim steps ASX Group has taken to manage the issue at the earliest possible time. Initiatives of this type are important to ensuring investors remain confident and informed.”
The ASX has agreed to the recommendation, the ASIC said. After the outage, ASX has—among other things—enhanced its monitoring capabilities, increase support staff, and trained staff to improve incident management.
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