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JET failure leads muttering brokers to JSE door

Story Filed: Thursday, June 15, 2000 12:45 PM EST

Johannesburg (ITWeb, June 15, 2000) - Stockbrokers were muttering unmentionable things about the Johannesburg Stock Exchange this week following the crash on the automated trading system that cost the market almost two-and-a-half hours of trade time.

Late Monday afternoon, the JSE Equity Trading System (JET) crashed about 20 minutes before the market was due to close. After the glitch was fixed, the JSE allowed for an extra 30 minutes in order for stockbrokers to complete their transactions. However, on Tuesday morning, the JSE remained closed for the first two hours of the session to allow for the brokerages to catch up on their administration. The JSE then decided to cancel the late Monday trades.

Mike Bastini, JSE GM of market operations, blames the Monday crash on an unspecified technical problem.

"The JET system crashed, what the actual problem was I cannot say, but it was fixed really quickly," he says.

Bastini notes that some member firms were unhappy about the decision to reverse trades and had notified him that they are going to take the issue to the JSE committee.

"It was the smaller firms that were complaining. A problem for them is the lack of back office support and this makes it difficult for them to reconcile the trades. The bigger firms had everything sorted out very quickly," he says.

Neither Bastini, nor JSE dealers, wanted to name the firms that had encountered the most problems with trying to reconcile the trades and counter-trades.

"A problem is that many of the stockbrokers had notified their clients late Monday and early Tuesday that their instructions had been carried out. Now they are being asked to reverse those trades and obviously they are not happy at all," a dealer says.

The JET failure happened just before senior JSE management were to brief members on the exchange's accomplishments, including the stability of the trading system which until then had not experienced a failure for almost a year.

The JSE introduced JET on 8 March 1996 and the whole exchange converted in June that year. The system was originally developed by the Chicago Stock Exchange, which sold it to DSD Catalyst, a company that has a support office in Johannesburg.

JET currently supports consecutive connections, ie terminals directly linked to the system. A larger unknown number of terminals are also linked via the JET API gateway which allows member firms a sever- to-server connection.

On Thursday, a busy day for the JSE with more than R3 billion worth of trade transacted, a total of 792 terminals were active on the JET system.

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-- (Dee360Degree@aol.com), June 15, 2000