The Circuit Breaker Problem on September 26, 2011

9.28.2011

Sincere apologies for any inconvenience caused to market participants and others who may have been affected by the problem related to the circuit breaker for platinum occurred at 10:18 AM on Monday, September 26, 2011. We are now investigating the cause and will issue a separate report on findings once results are obtained.

1. Incident (September 26)

The CB was triggered for the second time that day at 10:18 AM. Afterward, the trigger level, which should have been set at JPY600, was set at JPY800 (the JPY200 initial trigger level + (3 x JPY200 expansion amounts)) and trading was resumed following a 5-minute halt.

2. Problem cause

The cause of the problem is now under investigation.

3. Immediate measures

Until the defect is corrected, TOCOM will carefully check if the trigger level and the number of CB trigger are appropriate, and will adjust the trigger level if necessary. Trading has progressed normally since the night session of September 26 and no adjustment is being made.
 

4. Treatment of trade executed

After 14:49:10 on September 26th, trades have been executed in the price that differed by more than \600 from the previous trading day’s (September 22) settlement price. In usual procedure, the CB trigger level should have been JPY 600, not JPY 800, so that CB is triggered following 5-minute halt before the matching, and the trading resumes at 14:54:10.
As a result of careful examination of market condition, TOCOM decided to keep those executed trades as they stand.

Let us again express our sincere apologies for the inconvenience and concern caused by this incident. We take all possible measures to ensure it does not happen again. Thank you for your kind understanding.

 

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