Tokyo exchange to spend over $500m on trading systems

Tokyo exchange to spend over $500m on trading systems

The Tokyo Stock Exchange, which has been plagued by a series of operational failures, is to invest around $529m over the next three years on upgrading its electronic trading platform.

TSE chairman and president Taizo Nishimuro told reporters that the exchange was planning to spend around $128m on improving its existing trading platform, $255.9m on the development of next-generation systems and $145m on new back-up systems under a new three-year business plan starting in April.

The bourse was forced to close early on 17th January because its trading system was unable to cope with a surge in sell orders. The spike in orders was triggered by panic selling that stemmed from fraud allegations surrounding Internet services firm Livedoor.

The exchange has since curbed trading and has delayed the start of each day's afternoon session by 30 minutes. Last month the bourse announced plans to boost the order handling capacity of its electronic dealing system from the current nine million to 12 million trades a day by May.

That systems shutdown was the latest in a series of problems with the TSE's trading platform. In December the exhange's systems failed to cancel a mistaken order from a Mizuho trader to sell 610,000 shares for one yen, instead of one share for Y610,000. That glitch came only weeks after the TSE suffered a systems failure that halted trading for more than four hours on 1 November 2005.

As well as the systems overhaul, Nishimuro says the exchange is also looking to expand the scope of its financial products such as derivatives and futures in light of fierce competition among global exchanges.

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