Aussie Derivatives Frozen With Tech Difficulty as Stock Futures Expire, Fed Looms

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  • Government bond futures halted, among 10 most-traded globally
  • ``This is a massive headache,'' says IG Ltd.'s Evan Lucas

Trading on Australia’s main derivative platform was halted for more than two hours due to a software fault, leaving investors unable to trade stock-index futures after September contracts expired.

Exchange operator ASX Ltd. is looking into the cause of the fault on its ASX Trade24 platform, which handles equity derivatives, government bond futures interest-rate derivatives and contracts on energy and grains, Sydney-based spokesman Matthew Gibbs said by phone. Trading on S&P/ASX 200 Index futures expiring in December was frozen between 12:48 p.m. and 3:04 p.m., Bloomberg data show.

“This is a massive headache,” said Evan Lucas, a market strategist at IG Ltd. in Melbourne.

Many other prominent financial markets suffer faults. Eurex, one of the world’s biggest futures markets, had to delay the start of futures and options trading by more than two hours in July and Russia’s primary exchange was down for two hours last week. In December, the Singapore bourse opened its securities market 3 1/2 hours late because of a software error, less than a month after halting trading for more than two hours on Nov. 5 due to a power-supply failure.

Nassdaq’s three-hour malfunction in August 2013 froze thousands of stocks, while a CME disruption in August 2014 prevented buying and selling of contracts tied to major stock indexes, Treasuries, oil and gold.

Australia’s biggest cash-equity market remained open, with the benchmark index rising 0.9 percent as of 3:27 p.m. local time. The overnight session will open as usual on Thursday, said ASX’s Gibbs. The expiry of September futures contracts on the S&P/ASX 200 Index had completed before the incident, he said.

The three- and 10-year bond derivatives that change hands on ASX Trade24 are among the top 10 most-traded interest rate products globally, according to ASX’s website.

Three-year bond contracts fell to touch 98.01, the lowest since Aug. 17. They had been trading at 98.04 just before ASX 24 halted. Futures traders in the U.S. see a 32 percent chance the Federal Reserve will raise interest rates for the first time in almost a decade on Thursday in Washington.