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on november 29, a big shock occurred in the futures market: at 1:30 p.m., the last exchange unexpectedly "went down" when it opened. there were no transactions in more than ten futures varieties, and the time-sharing curve showed a straight line. after 20 after several minutes, it returned to normal at about 1:52. at 5:30 pm, the official website of the previous issue officially posted an announcement of this incident.

as of now, the shfe has not announced the specific cause of this system failure. it is understood that after trading resumed at 1:52, the main contracts of multiple trading varieties on the shanghai futures exchange plunged for a short period of time, but most of them rebounded afterwards. at the same time, relevant interviews show that no investors have been found to have suffered losses due to the failure of the exchange.

although there was a breakdown, fortunately there was no major loss.

in fact, exchange system failures occur from time to time across the country and even around the world.

next, the editor will give you a brief review of exchange system failures in recent years:

tokyo stock exchange

earlier this year (october 9), the stock trading system of the eastern stock exchange failed, and some large brokerage firms suspended investor orders. according to reports, the cause of the failure was that a securities company mistakenly sent a large amount of electronic data, which seriously exceeded the system's processing capacity. less than 40 of the 90 securities firms connected to the system were affected.

tse managed to resume trading through backup lines. it is reported that in addition to stocks, etf and other trading order systems also failed. one of the four lines connecting brokers could not be connected. the east exchange notified each broker to use the remaining three lines (but there was a situation where it was too late to switch). on the 10th, japan exchange group stated that the fault had been resolved. data show that the trading volume of the market hosted by the east exchange on the 9th was basically the same as usual.

london metal exchange (lme)

on july 22, 2016, the lme electronic trading system was interrupted, and there was no opening data for three-month copper, aluminum, lead, zinc, nickel, tin and other metals in london in the early trading that day. a spokesman for the hong kong exchange said the suspension of lme metals trading was due to link issues.

historically, the lme has experienced many outages. for example, on september 24, 2013, the lme suspended trading on its electronic platform early that morning due to a technical failure. the suspension lasted about three hours. the lme issued a notice 15 minutes in advance, and then suspended electronic trading in a controlled manner at 16:58 beijing time to avoid losses caused by technical failures.

singapore exchange

on july 14, 2016, due to duplicate transaction confirmation information in the system, sgx entered an "adjustment period" more than two hours after the opening of trading and suspended stock trading. the sgx issued an announcement that day and expected to resume trading at 2 p.m. however, due to system reasons, trading would not resume until the 15th. dbs bank, singapore airlines stocks, etc. were affected. in december of the same year, an accident occurred that delayed the opening of trading for some derivatives contracts for two and a half hours. the sgx did not explain the cause of the failure afterwards.

as early as november 2014, trading on the sgx was suspended for nearly three hours due to a power outage; less than a month later, the opening of trading was delayed due to a technical failure in the trading system caused by a software upgrade. afterwards, singapore established a high-level investigation committee to investigate. the following year, the sgx published the investigation report and announced an investment of us$15 million to improve infrastructure. however in 2015. its derivatives market transactions were interrupted once in august and october.

chicago mercantile exchange

on august 24, 2014 (local time), cme group's global electronic trading system platform stalled due to technical issues after opening, causing electronic trading in the futures market to be suspended for up to 4 hours. affected contracts include u.s. stock indexes, u.s. treasury bonds , crude oil and derivatives such as gold and silver.

on april 8 of the same year, cme group suspended trading on some contracts for more than 90 minutes due to technical issues. this error caused the interruption of futures and options trading on products such as corn, wheat, live cattle, and hogs. however, it is cme group’s largest source of revenue. contracts such as interest rates and stock index futures were not affected.

russian exchange

on july 30, 2014, trading in russia's largest stock trading market was suddenly interrupted due to a software failure, three hours before the closing of the day. after nearly two hours of maintenance, trading officially resumed at 5:50 p.m., and the closing time was postponed by 30 minutes.

the exchange said the outage was caused by a fund switching operation that caused errors in several components of the trading system, paralyzing the trading and clearing systems. however, the failure hampered normal trading in the stock and bond markets, while the foreign exchange and derivatives markets were not affected.

nasdaq exchange

in may 2012, the nasdaq trading system failed during the facebook ipo. many traders on the stock exchange failed to confirm orders in time, resulting in market participants being unable to learn the information for hours or even days. their risk of holding facebook stock.

the following year, nasdaq announced that it would compensate market participants who suffered losses at that time up to us$41.6 million, and relevant companies must agree not to sue nasdaq before december 23 before they can receive one-time compensation. however, according to estimates by multiple market makers, the accident caused them a total loss of about us$500 million. in addition, the u.s. securities and exchange commission also fined nasdaq $10 million.

the above is just a partial list. overseas exchanges that have experienced system failures in recent years also include the bombay stock exchange, chicago board options exchange, philadelphia exchange, new york stock exchange... among them, many exchanges have experienced failures more than once.

next, let us turn our attention back to china:

shanghai stock exchange

on november 5, 2010, the shanghai stock exchange experienced a system failure and issued an announcement on the same day to suspend etf subscription and redemption.

it is understood that at 10:16 a.m. that day, a trading host of the shanghai stock exchange trading system went down due to a malfunction, and another host took over in time. however, due to the unexpected drop in real-time order processing capabilities during the takeover process, the market experienced an overall slowdown in order placing. the market is slow, and some members have experienced the withdrawal of the offer machine. during the market break at noon, the shanghai stock exchange carried out emergency treatment and repairs on the relevant trading hosts. after the market opened in the afternoon, it returned to normal and quickly processed the backlog of policies in the morning.

according to analysis, the accident on the 5th only affected the subscription and redemption business of etfs, and only involved the programmed arbitrage business of some institutional investors. the impact was relatively small and did not affect the normal trading of etfs.

in addition, in early 2012, due to data problems, the shanghai stock exchange unexpectedly experienced some stocks exceeding their daily limit.

shanghai futures exchange

in august 2011, the shanghai futures exchange also had an accident due to a system failure. at that time, the copper and aluminum futures contracts held by some customers were forcibly sold and liquidated, resulting in large and abnormal fluctuations in copper and aluminum futures prices. according to estimates, customer losses may be around 17 million yuan. in the end, all this loss was paid for by the previous period.

zhengzhou commodity exchange

at 10:06 a.m. on january 6, 2015, all futures varieties and contracts listed on the zhengzhou commodity exchange suddenly stopped trading. zhengzhou commodity exchange subsequently announced a trading suspension, and after the market opened at 1:30 pm, trading returned to normal.

zhengzhou commodity exchange’s explanation for this was that “a technical failure occurred in the main center’s trading system.” according to a number of futures sales offices in zhengzhou, after the accident, the headquarters issued a notice to all sales offices, telling them not to panic due to the reasons for the suspension of trading for high-quality customers. after trading resumed, the market overall was not greatly affected and the trading situation was relatively stable.

moving forward, on december 7, 2011, the trading market of zhengzhou commodity exchange was interrupted twice: the system was interrupted at 9:28, resulting in the suspension of all trading products. after resuming around 9:40, it was interrupted again at 9:47. zhengzhou commodity exchange announced the suspension of trading at 10:00, and after troubleshooting, trading resumed at 1:30 p.m. according to an announcement from zhengzhou commodity exchange, the cause of the failure was an abnormality in the remote trading server.

……

after reading it, do you feel it? . . a bit square?

unexpectedly, there have been so many exchange system failures around the world!

not only that, but looking at it as a whole, it also subverts our understanding: we originally thought that foreign exchanges have a longer history than our country, and their markets and related systems and systems are more mature and advanced, and they will handle such failures more appropriately, but as a result …most are no better than our country.

in terms of processing speed, most of the time it takes for my country's exchanges to handle accidents is about 3 hours, which is the same as lme, cme group, etc.; but in terms of the frequency of failures, according to the information that the author has found so far, two failures the minimum interval is 2 years, which is understandable and acceptable, and is much better than sgx’s twice a year.

another point that is very commendable is the responsibility of our country’s exchanges. as we all know, investing is risky, and investors are often left to bear the investment losses caused by technical failures. in the cases mentioned above, most of the cases are indeed true, but there are two exceptions: the system failure of the shanghai stock exchange in august 2011 and the trading system failure of the nasdaq in may 2012. both companies compensated investors, but nasdaq’s compensation of us$41.6 million was only equivalent to 8.32% of market participants’ losses, while the shanghai stock exchange paid for all losses. (although the amount of loss cannot be compared, the compensation ratio... 100% is much more satisfying after all)

both investors and exchanges certainly hope that the system will always be normal, but exchanges are run by people after all, and there will always be bugs in the system. therefore, what we have to do is: investors stay calm, and exchange personnel learn from history and improve their own management and fault handling capabilities.

in the editor's opinion, the methods of the eastern stock exchange and the russian exchange are worthy of reference by our country's exchanges:

backup system. east communications has backup lines. once the current application system fails, the backup system can quickly take over without affecting normal transactions. of course, the east exchange's backup line also has shortcomings (there was no time to switch, and the shanghai stock exchange's backup host also experienced an unexpected drop in processing capacity). therefore, the exchange also needs to guard against such risks when setting up backup lines;

flexible adjustment. when trading on the russian exchange returned to normal, although it had already reached the normal closing time, the exchange chose to postpone it to minimize the impact of the system failure on the day's trading.

there is also a very special situation: if you find a system failure before the market opens, don’t forget to notify us in advance.