SEC quizzes PSE on April 8 trading disruption

THE SECURITIES and Exchange Commission (SEC) is not taking lightly the 41-minute trading disruption that happened in the Philippine Stock Exchange on April 8 which the local bourse had attributed to third-party communication line problems.

The SEC has written to the PSE to quiz the local bourse on the trading halt that happened from 10:29 am to 11:10 am on April 8.

A document containing a report to the SEC en banc showed that the PSE had been asked to explain in writing “if and why the PSE has no redundant communication line that may be used in case its main line is disconnected, as what allegedly happened during the aforesaid halt.”

The incident on April 8 was the first trading disruption seen in the PSE this year and the first time since trading glitches occurred three times in August 2015, an event that then likewise called the attention of the SEC.

The PSE, for its part, explained that the trading halt was due to a “third-party communication line disconnection within the exchange system’s network.” It added that the incident was not related to the trading terminal issue encountered in August 2015.

The exchange determined the issue to be strictly confined to the communication line systems, the PSE said.

The SEC now wants the PSE to submit a written statement and certification from its third-party communication line provider Globe Telecom to confirm the occurrence of said disconnection of communication line.

The PSE was also asked to submit a system diagram of the communication line identifying the connection which had encountered such problems.