Statement on Trading Disruption on November 1, 2011

11.16.2011

 

Tokyo Commodity Exchange deeply regrets the inconvenience to market participants and concerned parties fromthe disruption to trading on November 1, 2011.

An investigation conducted by the Exchange has determined that the problem resulted from the following cause:

1. Occurrence of Disruption

At 7:07 p.m. on November 1, 2011, the Exchange discovered a defect bid/ask price indications for the Gold Standard, October 2012 contract. At 19:17 JST, in accordance with Exchange business rules, Gold Standard, Gold Mini and Gold Options contracts were halted.

At 8:45 p.m. on the same day, the Exchange decided not to resume trade for the affected contracts, as the source of the problem could not be identified and solution was not at hand.

Having gained confidence in the provisional coping (see Item 3 below), the Exchange commenced the day session at 9:00 a.m. JST on November 2 as usual.

2. Cause of the Problem

The results of the investigation found that the defect was caused by a software problem related to indicative price generation.

3. Solutions

The Exchange has applied a provisional process through which it monitors indicative prices to detect and solve problems manually. Since the close of night session in the morning of November 2 the process has run successfully.  

In the future, the Exchange plans to implement a corrected program. This is to be provided by its supplier, and will be implemented to the production environment after having performed sufficient verification tests.

Tokyo Commodity Exchange continues to develop more stable marketplace while making every effort toensurethese events will not reoccur. Your continued understanding and support is highly appreciated.

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