Traders take a SEAT and wait

The latest failure of the Australian Stock Exchange’s SEATS system, which shut the market down for three hours was inexcusable. It was the second downtime fiasco in recent weeks, and the umpteenth since the Exchange sacked the chalk boys. The timing is never good. There was a failure the morning after the Libs won the Federal election in 1998. On this occasion, the market was trading quietly before the system went down, and showed signs of frustrated selling afterwards.

It is unacceptable that overseas traders, who might actually want to execute an order here, have to hang around all day while somebody goes out the back with a spanner. Hello? Technologically advanced economy here.

The ASX is a publicly listed company. It recently signed an agreement with the super efficient Singapore exchange, to electronically link share trading between the two markets. Early next year there will be a deal with Bloomberg that will enable Australian investors to trade US stocks and vice versa. It would be nice if things worked at this end.

A number of Australian companies have flagged that they will shift their domiciles or get dual share listing overseas if the ASX does not deliver on its efforts to achieve deeper market liquidity. The questions that should be asked are: Why is our trading system malfunctioning? Is there a back up? If not, why not? At the very least somebody should get a kick up the SEAT.

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