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Inquiry into stocks power chaos

By Carmen Cheung

STORY: THE stock-market chaos caused by a split-second outage on the first trading day in the Year of the Dragon will be discussed by the financial affairs panel of the Legislative Council on Monday.

Panel chairman Ambrose Lau Hon-chuen made the decision yesterday after receiving an urgent request from panel member, Sin Chung-kai, the Democrat who represents the information-technology constituency.

Mr Sin said Tuesday's chaos, which was unprecedented, was not just a computer matter, but could be related to the management of The Stock Exchange of Hong Kong (SEHK).

He said it was a must for those at management level to be responsible for dealing with important things, like handling transactions in the stock market, to prevent any possible computer problem that might affect normal operations.

``So, it's necessary to install a non-stop backup electric-power supply system. This would enable the computer system to continue functioning even when normal power supply stops suddenly,'' Mr Sin said.

The legislator doubted that the incident might have been caused by inadequate testing of the back-up electric-power supply system.

He described the incident as a ``very serious matter'' and urged the SEHK to examine its existing computer system and the backup electric-power supply system to see whether there was any problem.

Mr Sin warned that Hong Kong's status as an international financial centre might be affected if the stock exchange failed to find the cause of the outage and come up with a solution.

He said the role of the SEHK was to ensure a normal and smooth operation in the stock market, and it was very important for it to preserve Hong Kong's status as a major international financial centre.

Mr Sin said that in a globalised economy, it was a trend for many transactions to take place in other financial centres like London and New York.

``If Hong Kong lacks a first-class transacting system, or fails to maintain a first-class market, which is well managed, many transactions will leave the local market for other centres,'' Mr Sin warned.

He said thepanel meeting should be attended by the SEHK chief executive, Alec Tsui Yiu-wa, and a senior representative of the Securities and Futures Commission.

Mr Sin wants to determine whether the chaos was due to human error or a lack of maintenance and testing of the system.

He would also ask those attending the meeting to explain why the SEHK had initially said it recognised the transactions made after 4pm on Tuesday, but announced two hours later it would not recognise them.

Mr Sin previously sat on a select committee that investigated the chaotic opening of the new airport in 1998.

Asked whether someone should resign or be punished if it was confirmed that the chaos was caused by a lack of tests and maintenance of the system, Mr Sin replied: ``I see no reason why those connected with the case can dump their responsibility.''

-- Homer Beanfang (Bats@inbellfry.com), February 10, 2000

Answers

What is a "power chaos"; does anyone have more information on what this problem actually was?

Lucy

-- Lucy (windsng@123.com), February 10, 2000.

Sounds like the problem was failing to adequately handle a power glitch...they need a massive UPS...

-- Mad Monk (madmonk@hawaiian.net), February 10, 2000.