China vets brokerages' computer systems after £2.4 billion buy error
Source: Reuters
(Reuters) - China's more than 110 brokerages will come under government scrutiny after Everbright Securities mistakenly made 23.4 billion yuan (2.4 billion pounds) of buy orders, collectively the biggest erroneous trade in Chinese stock market history.
The China Securities Regulatory Commission (CSRC) decided to widen its investigation of stock trading systems to all brokerages following its probe into a small Shanghai-based company that made the high-frequency trading software used by Everbright, a CSRC spokesman said.
The CSRC is trying to determine whether design flaws in the trading platform made by Shanghai Mercrtsoft Technology Co were responsible for Everbright's trading glitch on August 16. The malfunction caused the brokerage to place a series of mistaken trades that totalled 23.4 billion yuan, spurring a massive swing in Shanghai stock prices. Everbright has since replaced its president.
Everbright's trading error exposed shortcomings in China's trading systems and their oversight, industry experts say. It has prompted local securities firms to review their existing practices and may result in greater regulatory supervision.
Read more: http://uk.reuters.com/article/2013/08/22/uk-everbright-tradingerror-idUKBRE97L09U20130822
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