Another trading disruption at Singapore's exchange frustrates investors

By Aradhana Aravindan and Masayuki Kitano

SINGAPORE (Reuters) - The Singapore exchange on Thursday suffered its second trading disruption in five months, with the frequency of the stoppages frustrating investors even as authorities try to revitalise the bourse in one of Asia's major financial hubs.

The Singapore Exchange Ltd said trading opened at 10 a.m. local time, (0200 GMT), more than two hours after the normal scheduled start for some derivative contracts such as the Nikkei 225 index futures.

"If you are aspiring to be a serious player in the global financial markets, then these kind of issues should not be happening every few months," said Ho Song Hui, assistant director of research and content at investment products distribution platform iFAST Corp.

In its statement on Thursday, SGX said it had implemented a new derivatives trading and clearing system on Nov 14. There was no disruption to cash equities trading.

"A specific issue relating to the expiring December Nikkei 225 Futures contract delayed the opening in the Nikkei contract and some other contracts. This was detected by our monitoring processes and addressed immediately," it said.

In an emailed statement to Reuters, the Monetary Authority of Singapore (MAS) - the city state's central bank and SGX's regulator - said it has asked the exchange to probe the cause of the latest trade disruption.

"MAS has instructed SGX to conduct a thorough investigation to find out the root cause of the delay and submit its investigation findings to MAS," a spokesperson for the central bank said.

The latest disruption follows earlier mishaps, piling pressure on Chief Executive Loh Boon Chye as he tries to rejuvenate a bourse facing stiff competition in the region. In July this year trading in the securities market was suspended for several hours due to duplicate trade confirmation messages being generated. It resumed trade only the next day.

In August last year, trading on the derivatives market was temporarily suspended. The exchange was also hit by two disruptions in 2014, caused by a software error and a power failure, which led to a rebuke by the MAS.

"It's sort of a blight and it makes you a little bit concerned about the frequency of these issues," Stephen Innes, senior FX trader for broker OANDA in Singapore.

While Singapore is Asia's leading venue for foreign exchange trading and has grown as a derivatives centre, the average daily value of shares traded on its exchange is less than the Thai bourse's and trails far behind rivals in Hong Kong and Tokyo.

SGX has announced plans to transfer its front-line regulatory functions to a separate subsidiary that will be governed by its own board of directors.

(Editing by Shri Navaratnam)