Reasons and consequences of the suspension of stock trading on the Moscow Exchange
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Trading on the stock section of the Moscow Exchange (MOEX: MOEX) were suspended for two days in a row due to a server failure. Such incidents have not been observed at the stock exchange for many years. The cause of the failure may be technical work to update the trading system being carried out these days. At the same time, according to lawyers, it will be difficult for investors to present claims to the trading platform.
For two days, February 13 and 14, trading in the stock section of the Moscow Exchange was not carried out for almost three hours due to failures. On the first day they were suspended “due to a hardware error on the main server.” The next day, it was about a “configuration error in the main server of the stock market trading and clearing system,” which they switched to the day before. The exchange warned that 13 And The 14th of February Technical work to update the trading system will take place on the T1 test circuit of the stock and foreign exchange markets. Kommersant’s interlocutor on the stock market admits that the failure is connected precisely with this. However, it did not touch the currency section on both days. The exchange’s press service stated that they “conducted additional checks and took a set of measures to prevent the recurrence of such situations.”
There have been no technical failures in trading in the stock section of the Moscow Exchange since May 2020 (then the trading delay did not exceed one hour). The last serious series of failures was in 2015 – 11 short incidents at once. The largest of them affected three sections – stock, currency and derivatives, as a result of which trading in each of them was not carried out for about two hours. At the beginning of September 2022, due to a technical failure, trading in currencies and precious metals was suspended for almost an hour and a half.
There was no active trading on the days of disruption: February 13 – 61.2 billion rubles, February 14 – 61 billion rubles. “Based on the time of the shutdown, insignificant volumes were affected,” notes Dmitry Lesnov, head of the customer service development department of Finam Financial Group.
The expert sees risks only in the inability to close or open a position at a suitable price.
In fact, this did not lead to serious consequences, agrees Capital Lab partner Evgeniy Shatov. During the suspension, the price of shares, bonds or other instruments may change significantly, but the incidents were caused by a technical failure, they were not accompanied by a collapse or other significant change in quotes, emphasizes Denis Krauyalis, adviser in the dispute resolution practice of Tomashevskaya & Partners.
As a result, Mr. Kraujalis believes, the decision to suspend trading on February 13 and 14 “should not have caused significant harm to the interests of investors.”
But even if someone’s interests were seriously affected, lawyers interviewed by Kommersant say that it will be difficult to hold the exchange accountable in court. Suspension of trading is the right of the trading platform, indicated in clause 23.2 of the listing rules, explains Mr. Krauyalis. The rules for interaction with brokers provide for broad powers of the exchange to suspend trading, added Orchards lawyer Piotr Matskevich.
The most famous example of litigation is the situation in 2020, when the exchange suspended trading in futures contracts for Light Sweet Crude Oil due to the quote falling below zero. Futures owners not only did not receive any funds on the expiration date, but were also obliged to pay quite impressive amounts themselves. However, arbitration courts in all cases and in all instances sided with the exchange. In October 2023, investors filed a lawsuit against the Central Bank due to the suspension of trading on the Moscow Exchange on February 24, 2022. At the moment, it is being considered in the Moscow Arbitration Court.
Investors also need to take into account that the exchange provides services only to legal entities, that is, brokers, Denis Krauyalis emphasized.
The trading rules, in particular on their suspension, do not establish any obligations of the exchange in relation to clients of trading participants (investors), he added: “Therefore, the courts most often refuse to satisfy investors’ claims due to the lack of legal relations between the investor and the exchange.”
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