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Summary
- FMA points out glaring deficiencies of NZX’s technological systems.
- This came to light when NZX could not handle trading volumes in April, and also suffered a crash of website for a week in August.
- NZX agreed that it had failed to meet its own standards of technological systems and agreed to work with FMA to upgrade them suitably.
The financial markets regulator (FMA) of New Zealand said that New Zealand Stock Exchange (NZX) was inefficient to handle its technological systems. This came to light due to multiple outages and cyber attacks reported at the exchange.
FMA’s strict review of NZX technological systems
Market watchdog, FMA said that instances of disruptions due to high volume of trading in April, and cyber attacks in August leading to crash of the Website, highlighted the insufficient technological systems at the NZX.
NZX admitted that it did not meet the technological standards of running a bourse. It said that it was ready to work with FMA to upgrade the exchange technologically.
Many disruptions to trading due to insufficient technological systems
The New Zealand Stock Exchange suffered many interruptions due to high volume trading from April to August last year. It was hit by distributed denial of service (DDoS) attacks, which even led to a trading halt and large-scale disruptions.
The regulator began a review after NZX suffered trading volume issues. As a market operator, the NZX was required to meet obligations like having sufficient technological backing.
FMA to continue focus on NZX’s technological resources
Besides that, it was also highlighted that NZX’s trading system was not able to deal with zero or negative securities. In addition to that, the performance of NZX’s systems also did not meet expectations of a fair and transparent system.
While trading volumes, NZX lacked requisite tools and practices.
IN 2021, NZX needed to invest in developing necessary technological systems in its markets operations to make it stable for the investors and the companies listed on the bourse.
FMA in its report said that because of what had happened on the bourse in 2020 and due to the findings of its review, the FMA would continue to focus on NZX’s technology till it had full confidence.
