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Shenzhen brokers pushed on disaster plan
(Shanghai Daily)
Updated: 2007-03-09 16:55 The Shenzhen Stock Exchange has set a month-end deadline for member brokers to appoint chief technical officers and report plans to deal with possible "system disasters," sources said Thursday.
The move, which comes as stock trading demand surges, reflects growing regulatory jitters over technical problems that may spook recovering investor sentiment and lead to unrest, insiders said. Brokerages must inform the bourse of the executives who will take charge of system risk controls by March 31, people familiar with the matter said, citing an internal notice sent by the exchange yesterday. The Shenzhen bourse also has set the third Saturday in November each year as the day to test all brokers' backup trading systems and their capabilities to cope with "technical catastrophes," the sources said. Blistering stock market gains in 2006 have lured Chinese mainland citizens into siphoning their bank savings to buy securities. Daily turnover so far this year is triple the average level for 2006, causing a slew of technical glitches. Most brokerages, including industry bellwether Shenyin & Wanguo Securities and Haitong Securities, have pledged to replace systems more accustomed to operating under a bear market. "Stock authorities are worried that if they don't act swiftly to urge system upgrades, soaring trading demand will eventually lead to a broad-range breakdown," said a Shenzhen-based brokerage source. The Shenzhen exchange early last month ordered brokers to conduct individual system checks and submit results to the bourse on a monthly basis, sources said earlier. Securities companies must inform the bourse within 15 minutes if trading can't proceed and file detailed reports on technical problems within 15 days, according to an earlier internal notice. The Shanghai Stock Exchange, the larger of the two mainland bourses, in January issued a emergency notice demanding brokers upgrade trading systems after a series of technical glitches spurred investor complaints. (For more biz stories, please visit Industries)
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