On January 22, the trading system of the Ho Chi Minh City Stock Exchange (HSX) stumbled upon a major technical fault, causing the bourse to power down for two days. Speaking about the unwanted incident, Le Hai Tra, acting chaiman of HSX, talked about the causes and effects of the technical plight as well as sustainable solutions for the long-run health of the trading system.

Le Hai Tra - Chairman of HSX

Could you provide further details on the technical glitch on January 22 as well as the preliminary results of the inspection into the matter?

The main reason behind the technical problem originated from the order matching software.

On January 23, experts were invited to evaluate the situation and patch the technical error. On January 24 HSX held two test simulations with securities companies in the entire stock market under the supervision of experts in order to carry out the testing and debugging of the trading system.

The simulation tests showed no further signs of the technical error, meaning the bourse is ready to operate again from January 25. In addition, HSX’s trading system was equipped with back-up plans, enabling it to cope with inevitable technical faults in the future. However, regarding similar software failures, our previous back-up plans appeared ineffective since all servers had been set up with the same version of software and encountered the same complication.

The system error presented the need for reforming the trading system. What technical solutions do you think could assure the safety and stability of the system?

First of all, the current trading system remains stable and efficient, as it was applied at the Chicago Stock Exchange and the Stock Exchange of Thailand before being set up in Vietnam. The system was fully maintained and regularly upgraded to meet the growth needs of the market.

In reality, over the past several years of vibrant stock trading as well as at the time the unfortunate incident occurred, the capacity of the trading system was not entirely utilised as the total number of order matching that the system handled merely constituted 25 per cent of its capacity.

However, the drawbacks of the current trading system lie in its flexibility and further long-run scalability. Consequently, HSX, being the key investor, together with two beneficiaries—Hanoi Stock Exchange (HNX) and Vietnam Securities Depository (VSD)—scheduled to implement a modern information technology (IT) project with its contractor, Korean Securities Exchange (KRX) with the objective of meeting the growth demands of the stock trading system in the long run.

To date, the design phase of the project has been finalised and we are transitioning into the phase of physical implementation and testing. The project should be coming into operation in 2019.

The undesirable halt of trading had a fair impact on investors. As a leader of the bourse, would you like to send thoughts on the incident to members of the market and investors?

Over the past years, HSX has been constantly claimed to be an organisation that operated for the common interest of members of the exchange and the market in general. Although the event was inevitable, the temporary closing of the market certainly left a negative effect on the reputation of the exchange and the Vietnamese stock market. For this, on behalf of the organisation, I apologise for all inconvenience that the shut down caused to investors and members of the stock market in the last two days.

Form where I stand, the stock market contains risks, such as technical faults that previously occurred in markets around the world and also in Vietnam. The unfortunate incident revealed admirable characteristics, such as bravery and adroitness in handling such a crisis.

Lastly, I would like to express my sincere gratitude to the members of the market and investors who have been trusting HSX and continue to co-operate with the organisation.

VIR