The Nairobi Securities Exchange (NSE) says it will invest an undisclosed amount of money to beef up infrastructure and address gaps in its service recovery capacity after Tuesday’s massive outage.
NSE chief executive Geoffrey Odundo said the new revamped system should be in place by the first half of this year.
“We are in the process of upgrading our ATS (automated trading system) to address some of these technical challenges and offer more services to our clients,” said Mr Odundo in response to our queries.
The system connects remotely to stockbroker offices, allowing them to trade from the comfort of their premises.
The ATS went live in September 2006, replacing the open outcry system that had been in place years after establishment of the bourse in 1954.
“We are working towards completing the system upgrade within the first half of 2019 upon final installation and receipt of relevant regulatory approvals. We are not at liberty to share costs (of the upgrade) at the moment,” added Mr Odundo.
The technical failure that interfered with trading at the bourse on Tuesday stemmed from a server failure in the high-frequency traders’ systems and exposed the relative fragility of the stock market infrastructure. “(The) technical issue was to do with server challenges at the depository,” said Mr Odundo.
A Sri Lanka-based information technology firm that specialises in selling electronic trading systems installed NSE’s automated system while India's Chella Software provides the broker back office system. Mr Odundo defended the quality of the software provided by the Colombo headquartered IT firm in the wake of recurring hitches, saying it also provides the same trading platforms to larger bourses including the London Stock Exchange and the Johannesburg Stock Exchange.
“We use the best international service vendors in our market…
“The NSE is using one of the best global equity trading platforms,” said Mr Odundo.
The upgrade news comes days after a system outage left investors counting heavy losses as trading was halted for about half of the day on Tuesday.
Before that, the last outage was in October 2018.