Tokyo Stock Exchange installs new clearing system

The Tokyo Stock Exchange successfully installed a new stock trade clearing system over the weekend and saw no problems during the first day’s trading, it said Monday.

The IT systems at the world’s second largest stock exchange have been in the spotlight after several problems in the last few months. The most recent occurred on Jan. 18 when the exchange was forced to close early to prevent a possible system shutdown. On that day heavy trading of shares pushed the exchange close to its daily capacity of 4.5 million executed trades.

It was the first time that the exchange had been forced to close early for such a reason, but came after two other incidents in the last 3 months.

In December the exchange was partly blamed for a mess caused when Mizuho Securities placed an erroneous sell order for shares in a newly listed company. The exchange was criticized because its computers at first accepted the order and then wouldn’t cancel it when the botched trade was discovered.

In November trading was suspended for half a day after a software patch was incorrectly applied to the exchange’s trading system, causing it to crash. System vendor Fujitsu took responsibility for that mistake.

In the light of the capacity problems earlier this month the exchange upgraded its old system a week ago to push the maximum number of executed trades to 5 million per day. The new system initially starts with the same limit so won’t immediately improve daily capacity.

The exchange has outlined a broad plan to increase this to between 7 million and 8 million trades sometime this year. Exactly when and how that will be done will likely be one of the issues in front of Yoshinori Suzuki, the Tokyo Stock Exchange’s new CIO, who will take up his position on Feb. 1.

Volume on Monday totaled 3.4 million executed trades, the exchange said.