Online Trading Strains Equity Markets’ Software

The increase in online trading is straining Tehran Stock Exchange’s trading platform, Ali Sahrayi, the company’s vice president, said.

Online trades make up a quarter of all trading on the exchange. On good days, the exchange has to handle less than 2 trillion rials ($55 million at market exchange rates), but trading is mostly three quarters of that, ISNA reported.

“Twenty-five percent of our capital market are in the hands of online traders and their orders put a lot of strain on the platform,” he said.

“A lot of orders enter the system in a short time, less than a second. This system was bought in the past and cannot handle the traffic.”

Sahrayi also said that in Iran, traders rush to trade on stock, which is not the case in international markets, and claimed this trading pattern is straining TSE’s platform.

Now, both TSE and Iran Fara Bourse executives want to buy new software to handle the expansion of their markets.

  Smelling Fishy?

But the breakdowns have become a recurring theme in the markets and an excuse for the Securities and Exchange Organization to wind regulatory clocks back and exclude online orders from initial public offerings, much to the dismay of traders.

This hands power back to brokers and investors claim foul play is involved.

The changes and breakdowns have caused outrage among non-institutional investors who allege charges of corruption and criticize the cozy relationship among the SEO, the market’s regulator, the exchanges and brokers.

Two weeks ago, a group of investors pleaded to SEO to undo its recent regulatory move backward and questioned the explanations offered for the rising incidents of market failures, alleging these failures were part of a scheme to defraud small investors and help big players get sweeter deals.

These issues have recently caused outrage in the social media. SEO has yet to respond to the letter and it seems the letter’s outrage has fallen on deaf ears.

  Talks of a New System

Regardless of what’s going on among institutional investors, brokers and the exchanges, the software running Iranian capital markets needs update. And an update is close, according to Boursepress.

Technicians from French IT Company, Atos SE, are negotiating with SEO officials on updating market software, media reported last week.

Previously, IFB officials were in talks with Korean suppliers of IT services, as French companies proved unreliable and refused to provide support after sanctions intensified.

“Using Korean suppliers will provide a measure of security for us,” an IFB executive told Financial Tribune on condition of anonymity.

Now the TSE is courting the French. But finally who gets the contract to update software for the two exchanges is yet undecided.

Atos SE is a European IT services corporation providing consulting and managed services and systems integration, hi-tech transactional services, unified communications, cloud, big data and cyber security services.