Root Cause Of November ASX Crash Found

Saturday 05 December 2020, 7:00 AM AEST - 1 month ago

Last month, a glitch caused the ASX to go down for nearly half an hour – merely one of the many telltale signs that the ASX’s CHESS system is showing its age, and coming out worse for wear.

NASDAQ Takes Responsibility

Although the ASX and others are working hard to upgrade from the CHESS system to a blockchain-based one that can carry the weight of one of the leading securities exchanges worldwide, NASDAQ has identified the bug in their software – used by the ASX – that nearly wiped an entire trading session last month.

NASDAQ Chief Executive Officer Adena Friedman issued a statement regarding the November 16 glitch.

“We take our role as a provider of mission-critical technology seriously and apologize to ASX, its customers, and all those impacted.”

The responsibility for the crash lies with an incorrect functionality in the Tailor-Made Combinations (TMC) order book created by NASDAQ and used by ASX Ltd.

A tool used by many equity and equity derivative traders across both public and private sectors, TMC  allows multiple trades to be carried out in a single transaction. When the error occurred on November 16th, the ASX was forced to halt trading in order to avoid losses by stock traders.

Although the ASX plans to bring back some functionalities of the TMC system on the 21st of December, this seems to be a stop-gap measure until the ASX makes its planned move towards a blockchain-based trading system.

Whether the ASX will choose its own in-house solution after scaling up the size of their project or go for the DESS system that the National Stock Exchange of Australia (NSX) has built is not yet clear – however, the planned switch to blockchain stock trading solutions will be a boost to the system’s reliability. 

Disclaimer: The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.