The Singapore Stock Exchange (SGX) has set up a board of inquiry to uncover the root cause of a fault which led to a three hour halt in security and derivatives trading last week.

The team includes four SGX directors - independent of the management - who have been told to report within two weeks of the original November 5th incident, in which a brief voltage fluctuation resulted in downtime for the exchange's trading systems, estimated to have caused more than $1 million losses for SGX and its partners.

Serious matter
The incident is a serious one, with the Deputy Prime Minister of Singapore commenting that it reflected badly on the nation. DPM Tharman Shanmugaratnam said similar problems have happened overseas, but the outage "does not help" Singapore's status as a financial hub: "It doesn't matter what happens overseas. We've got to get it right here, and make sure our reputation is kept intact," said Mr Tharman at an unrelated event, reports Channel NewsAsia.

The inquiry will look at all possible causes of the fault and the recovery processes. "This is equipment that had been tested, has gone through disaster recovery exercises, but something failed," he said. "So they have to get to the bottom of that."

The inquiry team will be chaired by Quah Wee Ghee, who also chairs  SGX's risk management committee. Other members include Chew Choon Seng, Kevin Kwok and Lee Hsien Yang. The preliminary investigation report must be filed by 19 November, after which the Monetary Authority of Singapore (MAS) will decide on any future actions.

The last reported outage at SGX took place in April this year when derivatives trading was suspended for more than three hours. In 2007, a major outage disrupted trading for more than a day.