An unexpected glitch in the trading software of Indian brokerage Religare Capital Markets caused shares of Tata Motors, the owner of Jaguar and Land Rover, to fall 10 percent in Mumbai trading on February 1. The glitch also affected prices of UltraTech Cement, Bloomberg reported.
“Due to some technical issue in the software, unintended transactions got executed,” Religare said. “The matter is being investigated by the software supplier.”
Tata Motors stock prices fell from 290 rupees to less than 270 rupees within a span of seconds before recovering, Bloomberg reported. While Religare will continue to operate as normal, the brokerage may have lost as much as 100 million to 150 million rupees ($1.8 million to $2.7 million) as a result of the error, according to estimates by CNI Research.
The issue comes four months after a software error caused trading to halt for 15 minutes on India’s National Stock Exchange due a brokerage’s erroneous orders, Bloomberg reported. A similar incident at U.S.-based Knight Capital Group in August led to $457.6 million in losses.
As such instances proliferate, industry voices have called for more oversight and more stringent software controls for financial systems. A recent BBC News article reported that banks are likely to see more software errors in the year ahead as program complexity outpaces human ability to manage it. In the Knight Capital loss, for instance, the error was the result of an update unexpectedly activating dormant code.
“Software is inherently difficult, and for developers who are dealing with systems which have been added to, cropped and changed over the years, it is a struggle to see where faults in a system are most likely to lie,” one coding expert told BBC News.
As financial software systems become increasingly complex, organizations can use source code analysis and code refactoring tools to clean up programs and catch potential errors. By implementing solutions such as static analysis, financial firms can mitigate risk of costly market mistakes.
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