Working out Solutions to Network Congestion on HOSE

2:04:20 PM | 3/8/2021

According to the State Securities Commission of Vietnam (SSC), the limited capacity of the Hochiminh Stock Exchange (HOSE) is the reason for order congestion in recent years.

In recent days, investors have complained about congestion of orders sent to HOSE when the liquidity reached VND14-17 trillion.

Some orders forwarded to HOSE by securities companies failed to input into the HOSE trading system since late December 2020, said the SSC. The SSC said that it quickly worked with HOSE and securities companies to assess the performance, work out reasons and put forth solutions to deal with existing problems to ensure the smooth operation of the trading system.

Investigations showed that order congestion was caused by various factors, but primarily the designed capacity of the HOSE trading system. The unexpected surge in trading order exceeded its limit on orders.

The SSC instructed HOSE to urgently study and deploy consistent solutions to ensure safe and smooth operation of the system.

For the short term, HOSE has applied solutions to optimize the quantity of trading orders entered into the system like raising the trading lot from 10 shares to 100 shares from January 4, 2021 to reduce odd-lot orders to ease the trading system; coordinated and requested securities companies to review and minimize errors to avoid negative impacts on the system; performed internal reviews, controlled risks, and strengthened shift duty during peak trading times.

For the medium term, the SSC told HOSE to study and propose a technical plan to ensure that the current trading system works smoothly until the new stock market information technology system (KRX) is officially put into operation.

The SSC will specifically guide and facilitate enterprises to temporarily transfer their listed shares from HOSE to the Hanoi Stock Exchange (HNX) to reduce the load on the HOSE trading system.

For the long term, the SSC will request HOSE and related units to quickly launch the KRX system and replace the current system as soon as possible to resolve system overloading.

“Currently, some experts have completed quarantine requirements in Vietnam and prepared to support Vietnam to put the system into operation," said the SSC.

Source: Vietnam Business Forum