Tokyo Stock Exchange’s CEO to accept salary cut over recent trading system glitch

Maria Nikolova

The Exchange has published a detailed report on the trading system glitch that occurred on October 9, 2018.

The Tokyo Stock Exchange (TSE) has earlier today posted a statement and a detailed report regarding the trading system glitch that occurred on October 9, 2018.

On October 9th at 7:31 a.m., an extremely large number of messages were sent to the arrowhead system from Merrill Lynch Japan Securities, which caused one of the four connection devices within arrowhead to come under heavy stress. As a result, the virtual servers connected to this connection device (“Connection Device #1”) were unable to connect to arrowhead. The TSE confirmed that orders were able to be placed normally via Connection Devices #2 to #4, and as such allowed trading for all issues according to the normal trading schedule.

The direct cause of the incident was that the connection device came under heavy stress as a result of an extremely large number of messages being received from Merrill Lynch Japan Securities. When the connection device came under heavy stress, arrowhead suspended the functionality of the affected gateway servers as designed for system stability, leading to the incident described.

Some securities companies were able to place orders via Connection Devices #2 to #4, whereas others were not. Each company is currently reviewing their own operational process, system design, and other issues, and the TSE is working with all related parties to confirm connection specifications, testing procedures and other system and process elements.

With regards to this incident, the TSE admits it was unable to adequately fulfill its mission as an equity market operator in terms of prioritizing initiatives for developing and managing a reliable system and ensuring market functionality. Given this, penalties have been imposed on top managers.

Koichiro Miyahara, President and CEO, is accepting a 10% reduction in monthly pay for one month. In addition, Ryusuke Yokoyama, Senior Executive Officer, is censured. Yasuhiko Tamura, Director, IT Development, receives a warning.

In order to prevent recurrence of the problems, TSE will create a forum for sharing information with securities companies about the cause of the incident and preventative measures, and will also take a number of steps in cooperation with securities companies to further enhance market stability. These include, among others, specifying system response required by securities companies in the event of a malfunction in arrowhead devices within connection specifications, as well as the planning and execution of malfunction tests with securities companies.

Read this next

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

XTB revenues hits zł1.45 billion in 2022, Q4 earnings disappoint

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2022 and the full fiscal year ending on December 31, 2022, showing one of its most successful corporate years.

Executive Moves

Lirunex Limited recruits Waleed Salah as head of MENA sales

Maldives-based brokerage firm Lirunex Limited has secured the services of Waleed Salah, who joined the company in the role of its head of sales for the MENA region.

Executive Moves

Trading 212 parts ways with co-founder Borislav Nedialkov

Trading 212 has a void to fill at its FCA-regulated business in London, following the departure of two key players, Raj Somal and Borislav Nedialkov.

Digital Assets

Binance acquires troubled crypto exchange GOPAX

Binance, the world’s largest digital asset trading platform, has reportedly acquired a majority stake in the troubled South Korea-based cryptocurrency exchange GOPAX.

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”