Thousands of private investors were left in limbo and sustained losses after an unprecedented computer glitch hit evening trade during the first day of work of Russia’s combined MICEX-RTS stock exchange, Kommersant business daily reported on Tuesday.
At 7:09 p.m. Moscow time (15:09 GMT) on Monday, the QUIK Internet trading system reported that “the RTS exchange is hit by technical problems and traders’ positions may possibly be recorded incorrectly.”
Several minutes later, trading was suspended on the FORTS futures market and the RTS Standard segment. As a result, the system started to register unauthorized transactions, with losses largely sustained by thousands of private investors.
Dozens of messages by private traders appeared in the internet immediately after the glitch.
“Before clearing, I had small long positions on Sberbank and the RTS index futures contract, with the rate of return at 10 percent on the account. After clearing, the account posted a loss of 8 percent and recorded the opening of short positions instead of long contracts,” private trader Roman, who declined to disclose his last name, told Kommersant.
Losses can be repaired only if all the unauthorized transactions are annulled, a practice that has almost never been used on the Russian stock market.
“It is unclear how all this will end and brokers cannot give explanations, while thousands of private traders may sustain losses,” Roman said.
The volume of trade on the FORTS evening session normally amounts to 20 billion rubles ($625 million).
Head of the trading department at Finam brokerage Dmitry Antsiferov told the paper that the glitch was likely due to a failure in the system of clearing held between the exchange’s main and evening sessions.
“It is absolutely incomprehensible how these calculations were made mathematically: traders closed positions and 15 minutes later they were in the red,” he told the paper.
The combined exchange reported several hours later on Monday that trading had resumed by 11 p.m. Moscow time but despite this, the first day of work of the MICEX-RTS trading floor failed to meet traders’ expectations, the paper said.
“This is an historic day. I believe that market participants are pinning great hopes on the merger of the exchanges and we’ll try not to disappoint you,” the paper quoted MICEX-RTS First Deputy Chairman Roman Goryunov as saying at the ceremony of launching combined trading on Monday morning.
The combined MICEX-RTS exchange issued a statement on Tuesday, saying the computer glitch was due to the incorrect recording of positions in the clearing system after testing last Saturday.
Goryunov said that 17,000 transactions had been concluded between 7 p.m. and 7:15 p.m. on Monday while the exchange did not force traders to close their positions after trading resumed.
“The exchange holds responsibility in compliance with contractual relations with market participants. All requests (to open or close positions) were made in accordance with the trading rules,” Goryunov said.