Investors who usually conduct their trades online or view live market data were left in a state of confusion Tuesday as the online capabilities for stock trading went down in early trading due to a system issue at the Jamaica Stock Exchange (JSE).

The JSE’s trading hours are between 9:30 am and 1:00 pm from Monday to Friday except public holidays. Between 9:00 am and 9:30 am is defined as the pre-market where market participants are able to gauge the bid and ask orders in the queue of the stocks or other securities available on the various markets. Bid orders speak to someone’s interest in buying a stock and ask orders speak to someone’s interest in selling a stock.

According to data compiled at 9:00 am, there were 1,347 bid orders valued at $153.04 million and 1,089 ask orders valued at $144.43 million at 9:18 am for One on One Educational Services Limited. One on One listed on the JSE last Thursday as the 100th actively listed company on the JSE in its 53-year history. The stock had halted up for three consecutive days and had closed at $2.31 on Monday, well above the $1 price for its initial public offering (IPO).

When the market officially opened at 9:30 am, normal trading occurred for all other securities on the market as normal with there being a minor delay in the information being processed exactly at open. By 9:37 am, 12,101,937 shares were traded at $2.34 a share across more than 385 trades for One on One. However, at 9:42 am, the data being displayed in the queue appeared again as if the queues were still in a state of pre-market. The best bid was being displayed at $3.02 and the best ask $1.62. In total, 41,852,804 units were being displayed as traded at that point with a trading range of $2.32 to $2.35 and $97.91 million traded so far.

By 9:56 am, all the queues for every security on the JSE’s Jtraderpro platform were zeroed out with data still being displayed for volumes and value traded at that point in the morning. When persons checked Jtraderpro again at 10:05 am, only three bid orders at $1.30 were being displayed for One on One and six ask orders ranging from $2.50 to $3.32 were visible. When persons checked JMMB’s Moneyline platform at 10:18 am, all stocks were listed as closed with no trading data being reflected for the day so far. Even Mymoneyja.com‘s live data feed was down by that point with the banner noting that they were experiencing issues with their data provider and that some live updates would be delayed.

“The API [application programming interface], which is what would feed to online trading, there was an issue with it. As you recognised, we sent a message to the market indicating that there was a technical difficulty that we had to speak to our provider about. The brokers who are connected using the ITCH programme for their online trading platform would have also been affected,” said managing director of the JSE Marlene Street Forrest in a call with the Jamaica Observer on Tuesday about the market disruption.

When asked about the issue, Street Forrest only indicated that it was an IT issue which impacted the JSE’s API, and that the Nasdaq system was not affected. The JSE has been using the Nasdaq trading and surveillance platform under a seven-year agreement since December 2019. The JSE had sent out a release to the brokers on the trading platform and market through social media about the technical issues impacting the market.

When asked if the system disruption was due to the influx of orders coming in largely for the One on One stock, Street Forrest replied, “The IPO was last week Thursday and today is Tuesday. It’s not correlated at all. It’s like any other system where some of the times there might be a technical problem. It’s not correlated, we have no issues with servers, our technology and storage are in the cloud and we have over abundance of capacity. We have excess capacity that can handle three times the volume and more than ten times what we’re having. This is why we encourage many more companies, 100 more, to list on this market because the capacity is endless.”

While market stability somewhat returned by midday, many investors described a feeling of being blind without an ability to rely on the accuracy of the data they were viewing to conduct trades. The JSE earns 0.35 per cent on every trade conducted on the JSE which means that reduced trading would have meant less income.

When asked if there would have been an extension to trading hours owing to the disruption, Street Forrest said, “Trading on the normal market was not down. We would not be in a position to extend trading because the online facility is down. The fact is that traders would not have been barred from trading because the normal facility which is calling your broker was available. We would not extend trading on that basis because there were alternative means of putting in your trades.”

The JSE has extended market hours in the past when the network provider was down, and trades couldn’t be conducted for a majority of the trading session.

An equity trading manager, who requested anonymity, questioned if the JSE’s IT and trading team would furnish a final statement to the brokers after the initial notice explaining what happened and what will be done to prevent a repeat of the event. The manager also questioned the rationale of having clients call brokers when the market has been seeing an influx of new investors in recent times.

This comes at a time when some brokers have expressed dissatisfaction in the communication by the JSE and the Jamaica Central Securities Depository (JCSD). They made a note of how the JCSD made a change to the system, implemented it, and had to roll it back as no one was prepared for it.

“We did not make any specific change at all. The broker has to tell you which system change we made and what the roll-out he was talking about. We have not made any JCSD system change, not at all. The various technologies that we have work, and they work beautifully,” Street Forrest said in response to the statement by the trading manager.

In May 2013, the United States Securities and Exchange Commission had fined the Nasdaq US$10 million for its poor systems and decision-making for Facebook’s IPO and secondary market trading. Exchanges in the USA have an obligation to ensure their systems, processes and contingency planning are robust to manage an IPO without disruption to the market. Queries to Financial Services Commission director responsible for securities Karene Blair about guidance surrounding stock exchanges in the digital age went unanswered up to press time.

“Technology will be down and you will have times when there is an issue. My team was very proactive in contacting the service provider and getting the online trading platform back up. I want to commend them on that,” Street Forrest said.