THE corporate regulator will review a second significant incident in a year at the Australian Securities Exchange after a computer problem yesterday meant companies were unable to make market announcements for nearly four hours.
The ASX kept the market open during the announcement outage, allowing trade to continue.
But trade was halted in 23 companies that issued price sensitive announcements while the system was unavailable.
Among the companies halted were Arrium, which has been the focus of keen market attention after last week receiving a takeover offer. Other well-known stocks included Quickflix.
The ASX defended its decision to keep the market open, saying, "The market was trading on an equally informed basis," spokesman Matthew Gibbs said.
No company announcements were published on the ASX between 12.11pm and 3.56pm. The backlog of announcements was expected to be published last night. The Australian Securities and Investments Commission was kept updated throughout the afternoon, the ASX spokesman said.
"As a precaution, any stocks with market sensitive announcements to release have been placed in a halt to prevent any disorderly or uninformed trading," he said.
A spokesman for ASIC said the regulator "monitored the situation throughout the outage".
"As part of its supervisory role, ASIC will review all aspects of the outage, including the causes and the ASX's handling of the situation.
"ASIC notes that where a price sensitive announcement was received the stock was put into pre-announcement trading halt. ASIC regarded this as appropriate."
Traders were not able to exploit the situation by switching to alternative market provider Chi-X, as companies are only listed on the ASX.
"When companies release information to the market they only do it to the ASX, so no one's getting that price-sensitive information," the ASX spokesman said.
Trading continued as normal otherwise.
Stocks that did not issue price-sensitive announcements were unaffected.
The glitch follows an outage last year that put the entire Australian market on hold for several hours due to a technology crash. That crash added to investor turmoil as it came in the middle of European-led global market volatility.
The problem overshadowed a buoyant day on the market, which closed above the 4500-point barrier for the first time since July 2011.
Frequently Asked Questions about this Article…
What caused the ASX announcement outage and how long did it last?
A computer problem at the Australian Securities Exchange (ASX) caused the announcement outage. No company announcements were published on the ASX between 12:11pm and 3:56pm — nearly four hours in total — while the system was unavailable.
Did trading stop on the ASX during the announcement outage?
No. The ASX kept the market open so trading continued generally, but 23 companies that had issued price-sensitive announcements were placed into trading halts to prevent disorderly or uninformed trading.
Which companies were affected by trading halts during the ASX outage?
The outage triggered pre-announcement trading halts for 23 companies that had price-sensitive announcements. Named examples in the report include Arrium — which had recently received a takeover offer — and Quickflix.
Could traders switch to an alternative market like Chi-X to access announcements during the outage?
No. Traders could not exploit the situation by switching to alternative platforms such as Chi-X, because companies only release price-sensitive information to the ASX, so that information was not available elsewhere during the outage.
How did the ASX justify keeping the market open while announcements were delayed?
The ASX said it kept the market open because it believed the market was trading on an "equally informed basis." As a precaution, any stocks with market-sensitive announcements were put into a halt to avoid disorderly trading.
Is the corporate regulator investigating the ASX outage?
Yes. The Australian Securities and Investments Commission (ASIC) monitored the situation during the outage and said it will review all aspects of the incident, including the causes and how the ASX handled the outage. ASIC also regarded pre-announcement trading halts as appropriate where price-sensitive announcements were received.
What happened to the backlog of company announcements from the outage?
The backlog of announcements was expected to be published later that night after the ASX system became available again.
Did the outage coincide with any notable market movements that day?
Despite the outage, the market overall had a buoyant day and closed above the 4,500-point barrier for the first time since July 2011, according to the report.
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