Cause of derivatives market outage

Moscow Exchange halted derivatives trading at 18:10 MSK on 15 October 2015 because of a problem with market data transmission.

Specifically, a risk balancing transaction between the derivatives and FX markets was processed incorrectly. The risk balancing service launched in July 2014 allows participants to reallocate risk between the derivatives and FX markets and thereby reduce their collateral requirements. The service is based on a complex data exchange procedure connecting the markets" trading platforms in real time. On Thursday, parallel processing of two electronic transactions overlapped, creating an inconsistency between a risk balancing service message and a regular derivatives market order. As a result, market data transmission was halted. 

The Exchange halted trading and swiftly detected and resolved the issue. The trading system was available for orders to be withdrawn within 40 minutes. The clearing and trading sessions started later (at 19:30 MSK instead of 18:45 MSK and 19:45 MSK instead of 19:00 MSK, respectively) to allow participants to make trades during the main trading session.

Options exercising and settlement were done correctly in the clearing session. The evening trading session for derivatives was run as usual. 

Market participants were informed of the status of derivatives market operations by email and SMS from the alerting service, as well as via the Exchange"s website.

Trading on all other Moscow Exchange markets – Equity & Bond Market, FX Market, Money Market and Commodities Market – continued uninterrupted throughout the day.

Moscow Exchange has decided to suspend the risk balancing service while work is carried out to improve the resiliency of the service.

We apologise for any inconvenience caused.

For further information, please contact the Public Relations Department at (495) 363-3232.