116 Accounts Affected: Duplicate Reports, Not Duplicate Executions
IBF Futures reported a trading system anomaly on the eve of a typhoon holiday, with investors saying positions still appeared in their accounts after closing out, and some unable to reach the dealing desk. FSC Securities and Futures Bureau Deputy Director-General Huang Houming said the firm reported the incident on the morning of the 23rd, with a preliminary count of 116 affected accounts, and the accounting system was repaired in the early hours of the 23rd. It was initially confirmed that the anomaly occurred in the execution reporting process — that is, an investor placed 1 order with 1 actual execution, but the system may have reported 2 executions, causing traders to mistakenly believe their orders were still unfilled. The FSC stressed this was a duplicate reporting of execution information, not duplicate executions.
Huang Houming explained that duplicate reporting and duplicate execution are different in nature. If an investor had already closed a position but mistakenly believed the position remained due to the duplicate report and sent another closing order, in theory there would be no position left to close, so no new execution loss would result. He also stressed that even reporting errors alone could cause investors to misjudge their holdings, confusing trading decisions and affecting the accuracy of account information and investor rights, and no trading system should produce anomalous reports.
Closed Positions Became Shorts, Investor Decisions Thrown Into Chaos
In practice, on that day an investor holding 1 long lot saw prices plunge and decided to sell 1 lot, only to later find the open interest had instead become 1 short lot held. As a result, when TAIEX futures gapped higher on Tuesday morning, there was an inexplicable extra loss. Other investors reported that the dealing desk phones could not be reached that evening, leaving them with nowhere to turn for help. Huang responded that futures firms should allocate sufficient and qualified business personnel, and TAIFEX will also review staffing and customer service in this inspection to clarify whether investors’ ability to dispose of positions in a timely manner was affected.
P/L to Be Calculated Based on 45,895 Points
IBF Futures is understood to have announced its handling method for this system anomaly, using 11 p.m. on October 22 and the TAIEX futures price of 45895 points as the calculation basis. Transactions executed after 11 p.m. that evening will be handled by calculating profit and loss from the benchmark point through to the customer’s final closing price, while entry orders already executed before that time will be calculated separately by segment. However, the execution and closing records currently shown in the system remain confusing, leaving investors puzzled, and how actual profit and loss will be recognized may still be disputed.
TAIFEX Inspection on the 28th, Maximum Fine of NT$2.4 Million
Huang said TAIFEX is scheduled to visit IBF Futures on the 28th to inspect the cause of the system anomaly, whether other trading issues were involved, and whether information system maintenance violated internal control rules. If the cause proves straightforward, TAIFEX is expected to complete its inspection report promptly and submit it to the FSC, with any subsequent penalty to be determined based on the findings. Under relevant rules, if a futures firm is found to have violated internal controls and related deficiencies, it may be fined from NT$120,000 to NT$2.4 million, and related penalty results will be announced publicly. The FSC stressed that the futures market already has risk control mechanisms such as margin and equity checks, and it will continue to supervise firms’ implementation to maintain trading order and investor rights.