Root Cause Of November ASX Crash Found

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.”

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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 16^th, 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 21^st 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.