On 5 June 2024, the International Organization of Securities Commissions (IOSCO) published a final report on market outages.

The final report follows a consultation that IOSCO conducted last December.

IOSCO notes that market outages, particularly if they occur on a listing trading venue, can be highly disruptive, impacting price discovery and market resilience. Previous IOSCO reports addressed disruptions, but mainly from the perspective of managing risks to critical systems and business continuity planning. This final report identifies key findings from recent market outages and puts forward certain good practices for trading venues to consider adopting to help to improve market-wide resilience during an outage. These good practices may assist regulators, trading venues and market participants in preparing for, and managing, future market outages and thereby help improve market-wide resilience.

The good practices cover:

  • Establishing and publishing an outage plan.
  • Implementing a communication plan which provides, through an appropriate communication channel, initial notice (as soon as practicable) of the outage to market participants and the general public and, thereafter, regular updates to all market participants on the status of the outage and the recovery pathway.
  • Communicating information relevant to the reopening of trading in a timely and simultaneous manner to all market participants, providing clarity on the status of orders and ensuring an adequate period of notice before the resumption of trading.
  • Ensuring the processes and procedures that trading venues will follow to operate a closing auction and/or to establish alternative closing prices are published in the outage plan and communicated to all market participants during an outage.
  • Conducting and sharing with the relevant regulators a lessons-learnt exercise of the market outage and adopt a post-outage plan, with clearly defined timelines and allocation of responsibilities for remediation, designed to reduce the likelihood of future incidents and to improve the ability of the trading venue to effectively respond to outages.