Nov. 25 (Bloomberg) -- Chi-X Australia Pty, which had planned to offer investors a way of trading the equity market closing auction starting today, postponed the product after a system error at ASX Ltd.
Chi-X Australia, the nation’s only competitor exchange to ASX, was set to offer its “market on close” product, which matches orders with bids at the closing price for each security. This would allow Chi-X Australia users to participate for the first time in the auction held on the ASX at the end of each trading day. A computer software error at ASX over the weekend prompted the Australian Securities and Investments Commission to postpone the start, said John Fildes, chief executive officer of Chi-X Australia.
“It’s a complete disaster,” Fildes said in a telephone interview today in Sydney. “ASIC asked everyone involved in this to delay. I will be meeting with ASIC this afternoon about it, but we don’t want to make a fuss, we’d rather get on with resolving this.”
The product for trading the closing auction through Chi-X Australia, known as MOC, was supposed to begin today for all S&P/ASX 200 Index companies, with no minimum order size. Traders would enter MOC orders from the market open at 10 a.m. in Sydney through to 4:20 p.m., when MOC trading will stop.
“ASX’s monitoring detected a potential issue with some third-party provided software that, along with other enhancements to ASX Trade, was due to be implemented last weekend,” Matthew Gibbs, a spokesman for ASX, said in an e-mail. “To prevent any disruption to normal market operation, we made the decision to postpone until a fix could be put in place. We were not prepared to put the Australian market at risk. We will now work with ASIC, Chi-X and clients to plan for a new implementation date.”
Daniel Wright, a Sydney-based spokesman for ASIC, didn’t immediately return a voicemail message left on his phone seeking comment from Bloomberg News. Chi-X Australia’s Fildes said he has spoken with Peter Hiom, ASX’s deputy chief executive officer, to express concern about the delay.
Chi-X Australia captured 16 percent of Australian equity trading by market value in the week through Nov. 22, with ASX taking the rest, according to ASX data.
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