The Australian Securities and Investments Commission (ASIC) has criticised the Australian Securities Exchange (ASX) for failing to inform investors of a market announcement platform (MAP) outage in a timely manner late last year.
The ASX's MAP experienced an outage in October 2012, which crippled the company's abilities to process and release market announcements for nearly 4 hours. Around 112 announcements, 23 of which were price sensitive, were submitted, and weren't released until after 4pm AEST on October 19.
As a result, the stocks of companies that submitted price-sensitive announcements were unable to be sold or bought until the announcements were processed.
The issue was found to be caused by the third-party product that was used to facilitate the ASX's MAP. It was a database memory failure, and despite the ASX moving MAP processing to its, the problem continued until after 4pm that day.
While ASIC had no concerns about the ASX's operational response time during the outage, it did question whether the group was effective in keeping people informed. It had taken ASX Group two hours to release a Voiceline (PDF) message, and more than three hours before it provided a service update on ASX.com.au.
"We recognise that a market operator should be given an opportunity to address a system issue, including reverting to a backup site," ASIC said in its market assessment report (PDF). "This needs to be balanced against advising the market of a system issue, and the interim steps ASX Group has taken to manage the issue in the earliest possible time.
"Initiatives of this type are important to ensuring investors remain confident and informed."
ASX Group didn't receive any formal complaints over the outage, but did receive a number of enquiries over the phone.
"We would have expected ASX Group to provide details of the issue to all market users at the same time through its Voiceline service, system status, and public website," the report noted. "This would have ensured all participants and users were kept equally informed of issues that may have impacted their investment decisions."
The ASX has agreed to review its user communication processes.
Thethat occurred in April this year was not covered by the report.
In late 2011, ASIC raised concerns that the ASX had gone ahead with upgrading its trading systems