FSA Starts On-Site Probe of TSE over System Failure

Economy Politics

Tokyo, Oct. 23 (Jiji Press)--Japan's Financial Services Agency launched on Friday an on-site inspection of the Tokyo Stock Exchange and its parent, Japan Exchange Group Inc. <8697>, or JPX, over a recent system failure on the exchange.

The FSA plans to examine the TSE's internal control system and aims to clarify the responsibility for overlooking the defects in the exchange's system that were behind the glitch, which triggered a full-day suspension of all stock trading on Japan's largest stock exchange on Oct. 1, sources familiar with the situation said.

Reflecting the seriousness of the incident, the FSA appears certain to impose an administrative punishment on the TSE and JPX, likely a business improvement order, the sources said.

On Monday, the TSE said the system failure was caused by a faulty initial setting for dealing with a glitch and an error in a related manual.

In the on-site inspection, the FSA hopes to find out why the TSE's "arrowhead" stock trading platform failed to switch to a backup device and to examine the flawed manual.

[Copyright The Jiji Press, Ltd.]

Jiji Press