PSE reveals recent outage caused by faulty connection between some brokerages and the exchange’s mobile trading app

The Philippine Stock Exchange [PSE 177.80 ?1.0%; 259% avgVol] [link] provided additional information on the serious outage that caused a 2.5-hour market-wide trading halt on January 3. In a statement posted to its website, the PSE said that the outage was caused by the “inability of at least one-third of the [brokerages] to connect to the PSE’s front-end order management system.” The PSE said that it has implemented “a design optimization” on the mobile trading application, and that they’re “working on further enhancements” to prevent the issue from happening again. According to Will Cabangon, President of AAA Equities, the issue is similar to outages that have happened in the past that were related to a certain software supplier that is used by brokerages to connect to the PSE’s order system. Mr. Cabangon said: “A bunch of brokers use the same software supplier, so when they go down, the PSE has to suspend according to the rules.” He acknowledged that the PSE has been pushing brokerages to “diversify away from this supplier”, and was hopeful that these repeated outages might finally convince some to make the switch.

MB BOTTOM-LINE: The market basically requires a quorum of brokerages with viable connections to the market’s trading systems in order to remain open, such that the PSE needs to halt trading if the number of brokers with a viable connection falls below a minimum threshold. While it sounds like the problem has been identified, it sounds like this kind of problem is something that will largely remain outside of the PSE’s ultimate control so long as brokerages are free to use different software providers to interface with its system. As someone who has spent a significant portion of my life in IT and IT-related fields, I feel for the PSE’s IT team because it is in the tough spot of having to be responsible for interoperability and system uptime in an environment with external variables. They can’t just be like, “Well, that sounds like a you problem, not a me problem”: for PSE’s IT department, everything is a “me” problem.

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