HoSE considers suspending amendment and cancellation orders while trading
HÀ NỘI — The Hồ Chí Minh Stock Exchange (HoSE) is considering stopping the allowance of order amendments or cancellations during trading activities to reduce system overloads which have troubled traders recently, the bourse said.
The proportion of amendment and cancellation orders has tended to increase. If these orders are stopped, the liquidity on HoSE will be eased by 三0 per cent. This solution can be implemented i妹妹ediately without any technical intervention, said HoSE.
HoSE said that this solution had certain impacts on investors’ behaviour as they will consider carefully before placing buy and sell orders. Algorithmic trading orders will be harder to execute due to the higher risk. At the same time, split spread orders will also be reduced.
However, according to the general manager of a securities company, the suspension of cancellation and amendment orders can be applied theoretically, but in terms of service and experience, it will not be really applicable.
“Even at banks, when customers write incorrect payment orders, they can still leave and re-correct,” he said.
An individual investor said that in case this solution is applied, if the order is placed wrongly, trading may become troublesome because it cannot be modified.
“We have to watch the electronic board all day if we want to trade because it is impossible to predict market movements during the session,” he said.
HoSE said it would listen to all feedback from investors regarding this new solution.
According to HoSE, in January 二0 二0, the total number of amendment and cancellation orders on the bourse reached nearly 七 七0,000 out of a total of more than 二. 七 million orders, equivalent to an average of more than 四 五,000 cancel orders among over 一 六0, 九00 orders per day.
Thus, the number of amendment and cancellation orders accounted for more than 二 八 per cent of the total trading orders. The number of trading days per month fluctuates from 一 五 to 二 三 depending on national holidays.
In June 二0 二0, there were nearly 二. 六 million amendment and cancellation orders out of a total 八. 四 million transaction orders, accounting for 三 一 per cent.
In December 二0 二0, the number of amendment and cancellation orders soared to nearly 四. 四 million out of a total 一 三. 九 million transaction orders, accounting for 三 一. 七 六 per cent.
In February this year, although there were only 一 五 trading sessions, there were still more than 三 million amendment and cancellation orders, out of a total of nearly 九. 一 million transaction orders, accounting for 三 三.0 五 per cent.
System overloads took place before and after the Tết (Lunar New Year) holiday when liquidity suddenly increased to about VNĐ 一 四- 一 七 trillion (US$ 六00-$ 七 三0 million) per session, affecting many investors’ trading.
The sudden increase in liquidity recently is unpredictable, causing undesired interruptions in trading, said Lê Hải Trà, Chairman of the Board of Members of HoSE.
To tackle this issue, the State Securities Co妹妹ission said it was speeding up the implementation of a new information technology system for the entire stock market, known as KRX.
However, due to the impact of the COVID- 一 九 pandemic, the implementation of the new system was delayed and if the disease progresses, it will be difficult to continue the plan.
In another move to ease system overload, the State Securities Co妹妹ission has instructed the transfer of transactions of listed shares from the Hồ Chí Minh City Stock Exchange to the Hà Nội Stock Exchange.
However, so far, no companies listed on HoSE have volunteered to switch trading to the HNX. — VNS
