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Jul 14, 2008

‘Significant’ financial losses after technical glitch delays opening of JSE

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JSE CEO Russel Loubser discusses what went wrong with the bourse's network system on Monday in an interview with Engineering News Online. (14-07-08)
 
 
 
Engineering|System|Services
Engineering|System|Services
engineering|system|services
© Reuse this The JSE's failing to open for trade until nearly 15:00 on Monday owing to technical problems entailed significant losses for the stock broking industry, for which CEO Russell Loubser apologised.



"Obviously, apart from the elevated blood pressure levels, our business is about volumes, and we've lost half a day," SA Stockbrokers broker Alan Momberg said in a telephone interview. "So it's a significant financial loss."

He noted that what worsened the situation was that Monday had been the first day that the market had been up in a while. "We've lost out on some selling opportunities."

"We know that we have inconvenienced the market, and we are very apologetic for that," Loubser told Engineering News Online. "The trading system hasn't been down in six years and our networks have been up for 99,6% of the time in the last six years."

"Whatever happened today was bad," Momberg said, adding that the JSE's announcement that it would stay open for trade until 19:00 on Monday evening would make a small difference, but that "the damage is done".

WHAT WENT WRONG?

Loubser stressed that the problem had not been with the JSE's trading system, but with the network, which stretched from London to Johannesburg, involving many different "players" in between.

He said that the bourse had managed to pinpoint where the problem arose "fairly early on", but did not want to disclose the information until a full investigation had been completed. The bourse became aware of the problem at 06:30 on Monday morning.

This probe, already under way, Loubser said, the JSE would complete "as soon as possible".

Financial Services Board (FSB) capital markets head Norman Muller said that the watchdog would receive a report from the JSE on the problem.

"It is standard practice that the FSB be informed immediately if the market can’t open, that such event be fully investigated by the JSE, and reported to the FSB. Appropriate action will be taken if an exchange be found guilty of any misconduct," he said in an email.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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