110 China brokerages to undergo government scrutiny after USD3.8 billion buy error

By IVCPOST Staff Reporter

Aug 25, 2013 09:24 AM EDT

More than 110 brokerages in China would undergo government scrutiny after erroneous buy orders from Everbright Securities. The latter mistakenly made CNY23.4 billion buy orders. China said this was the first of its kind and the biggest erroneous trade in the Chinese stock market history.

The China Securities Regulatory Commission (CSRC) had decided to widen its probe of stock trading systems to all brokerages. This was after CSRC conducted an investigation to Shanghai-based Everbright. The Commission probed on the company's high frequency trading software according to a CSRC spokesperson.

The CSRC had been trying to determine whether the flaws were from the trading platform designed and developed by Mercrtsoft Technology Co. The malfunction of the system caused Everbright Securities USD3.82 billion worth of mistaken trades. This also caused a massive plunge in the Shanghai stock prices. After the incident, Everbright fired the president of the company.

In a questionnaire given last Wednesday, the CSRC spokesman answered "The 'Mercrtsoft High-Frequency Trading and Investment System' that Everbright used was a customized system currently used exclusively by Everbright."

© 2024 VCPOST, All rights reserved. Do not reproduce without permission.

Join the Conversation

Real Time Analytics