Photo taken Oct. 2, 2020, shows the Tokyo Stock Exchange. The bourse reopened normally the same day after trading in all shares was halted for the whole session the previous day due to a system glitch. (Kyodo) ==Kyodo
Japan’s financial watchdog is planning to issue a business improvement order on Monday to Tokyo Stock Exchange Inc. and its parent company, following a system failure in October that caused a full-day trading suspension, sources familiar with the matter said.
With the order, the Financial Services Agency added to pressure on the bourse operator and its owner, Japan Exchange Group Inc., to take steps to restore international trust following the Oct. 1 disruption, the worst in the Tokyo market’s history.
The directive calling for measures to prevent a recurrence came at a time when Prime Minister Yoshihide Suga is trying to bolster Japan’s status as a global financial hub and making efforts to attract more investment from abroad.
It will be the fourth time that the financial watchdog has given such an order to the TSE. The last one was issued in August 2012 following a system glitch in that month that led to a temporary suspension of all derivatives trading at the bourse.
The latest shutdown was caused by a setting error, which prevented an automatic backup from activating after a memory failure in the TSE’s trading system. The shutdown also betrayed its inability to promptly resume trading in the event of an unexpected occurrence.
The setting mistake was blamed on an outdated manual provided by Fujitsu Ltd., developer of the “arrowhead” trading system, but the TSE has said it was responsible for the outage as a market operator.
As one of its preventive measures, the bourse, where about 3 trillion yen ($29 billion) is traded daily, has set up a panel of market professionals to craft new rules by March on how to resume trading in the wake of a serious shutdown.
Related coverage:
FOCUS: Race to boost financial hub status intensifies among Japan cities
Financial regulators probe Tokyo bourse over outage
Authorities plan inspection of Tokyo bourse over full-day outage
