The glitchy PSX trading system drama Stockbrokers want the old system back, but the PSX has already spent money on the new one By Ariba Shahid
C
hanges at the Pakistan Stock Exchange (PSX) aren’t exactly the most exciting events in the world, especially with all the other things going on in the country. And a change in the system used for trading at the PSX would not merit much discussion, but leave it to the good folks over at the stock exchange to keep us hooked with even the smallest changes they make. Since 1977, the PSX has been using the Karachi Automated Trading System (KATS) to execute trades at the stock exchange. Recently, it was decided that the system would be replaced by a new, more sophisticated system from China. Within days, the new system had
STOCK EXCHANGE
wreaked havoc in the shares market because of technical issues, causing trading to be suspended for hours as employees of the stock exchange scrambled to figure out what had happened.
What is the new system?
O
n October 25, 2021 the PSX moved from the KATS system to New Trading Engine (NTS) which they have procured from the Shenzhen Stock Exchange (SZSE), China. For some reference, the SZSE is the world’s third largest exchange which also happens to own a 40% stake in the PSX. The PSX had signed a contract in November 2019 with the SZSE worth $5 million to acquire the trading and surveillance
system in order to improve the operational and technological performance of the exchange. The system was to be introduced in March earlier this year, however, due to stakeholder concerns and requirements that were to be addressed the exchange decided to launch it in October 2021.As per the latest annual report by the PSX, the system has a safe operation record of 17 years without any trading interlude.
What’s happened since the new system came into place?
O
n October 27 2021, trading was suspended for two and a half hours in the middle of a session due to technical glitches in the newly
11
