Shanghai bourse defends handling of Everbright glitch

BEIJING - The Shanghai Stock Exchange, the largest bourse in China by market capitalization, has defended its handling of a recent incident in which transaction sums were incorrectly inputted for Everbright Securities, misleading investors.

The exchange said on Sunday that its handling of the incident on Aug. 16 was in accordance with regulations and precedents.

"Both the price and sum of the purchase orders placed by Everbright Securities during morning trading last Friday were within the stipulated range of the exchange, so we didn't issue any warning to the market," said the exchange in an online media briefing via its Weibo, or microblog, account.

Regarding the glitch being caused by a mistake in inputting transaction data, the exchange upheld its decision to not issue any warning by citing precedents such as an incident involving Taiwan Fubon Securities in 2005, when a trader mistakenly inputted an 80 million-yuan order as 8 billion yuan.

Erroneous trading by Everbright Securities on Aug. 16 caused a 5.96-percent spike in the benchmark Shanghai Composite Index in about three minutes.

Investors have been dissatisfied with the exchange's failure to alert them quickly to the glitch as they chased rising stocks and suffered great losses subsequently when prices tumbled.

Sunday's explanations from the exchange generated largely negative responses from netizens, who tend to think the exchange could have done more to warn investors of possible risks.

"The exchange is finding excuses through others' faults in failing to issue warnings," said a Weibo user with the screen name "Youyudeshengling."