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TSE Cash Equity Trading System Failure on October 1st

Updated: Dec 8, 2020

Establishment of a “Council for Recurrence Prevention Measures”

In connection with the failure in the “arrowhead” cash equity trading system on October 1, Tokyo Stock Exchange announced on October 19 that it would establish a “Council for Recurrence Prevention Measures” comprised of market users, with the aim of considering how TSE can better manage its response to system failures, as well as how it sets its rules and regulations to prevent a recurrence of the incident. The Council held its first session on October 23.

TSE explained that the recent system failure revealed not only issues with the IT system itself, but also issues with the operations of the system, such as the need for clarification and better transparency of standards and procedures for recovery, as well as the absence of any rules for the handling of orders in the event of a system failure. The market users making up the Council will consider how TSE should further develop its rules and regulations from the perspective of investors, taking into account actual developments overseas.

The Council is comprised of a variety of members such as securities companies, investors, and system vendors. The Financial Service Agency of Japan and other such organizations are expected to become observers.

Due to the system failure, TSE suspended all trading on October 1 and replaced the faulty system components within the day. Trading was conducted as usual the next day.

TSE expressed its deep apology for the inconvenience caused to many investors and other market users due to this failure.

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