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Trading halts again as NZX sees fourth day of attacks

After suffering major outages in the last three days, NZX has confirmed that they are again experiencing connectivity issues as a result of repeated distributed-denial-of-service (DDoS) attacks on the service this week.

Trading was halted again this morning, with the exchange operator extending the Pre-Open for the NZX Main Board and Fonterra Shareholders Market. The NZX Debt Market was placed into a halt at 9.58am, while the NZX Derivatives Market remains open.

Yesterday, NZX confirmed reports regarding the third security incident, noting the attacks suffered until that point were similar.

"NZX confirms that it is working with its network service provider to address a further issue today, impacting NZX system connectivity," yesterday's statement said.

"It appears that this is similar to yesterday’s issue. NZX halted trading in its cash markets at approximately 11.24am."

The statement adds that NZX's network provider "continues to investigate the source of the issue."

It comes after a joint statement from NZX and Spark, of which NZX is a customer, revealed the first attack was successful in downing system and network connectivity for a brief time in the afternoon. It achieved this by saturating the network with ‘significant’ volumes of internet traffic.

“This afternoon a Spark customer, NZX Limited, experienced a volumetric DDoS (distributed denial of service) attack from offshore, which impacted NZX system connectivity,” the on Tuesday statement read.

“As such, NZX decided to halt trading in its cash markets at approximately 15.57.”

While it’s not clear how long the networks were down, the statement added that the attack “was able to be mitigated and connectivity has now been restored for NZX.”

The attack did not do lasting damage to trading confidence yesterday - the NZX 50 index closed up 0.6%, or 72 points, bringing the index to 1193, despite the trading halt.

In a memorandum released this morning, NZX assured its market participants that the mitigation of the attack ensured trading could continue as normal.

“Yesterday afternoon NZX experienced a volumetric DDoS attack from offshore via its network service provider, which impacted NZX network connectivity,” the memorandum said.

“The systems impacted included NZX websites and the Markets Announcement Platform. As such, NZX decided to halt trading in its cash markets at approximately 15.57. The attack was able to be mitigated and connectivity has now been restored for NZX.

“NZX will resume normal market operations today.”

The attack comes as the NZX experiences a better than expected first half of the year, with the exchange operator seeing profits rise 40% to $9 million in the six months to June, as companies raised almost $6 billion of equity in the same time period.

NZX chief executive officer Mark Peterson told RNZ that there were multiple causes for optimism.

"We've seen a rise in activity right across the board whether it's local retail and institutional investors or even interest from offshore,” says Peterson.

“I think there's a few factors at play - asset class relativity is definitely one of them - obviously the banks aren't paying as much as they used to.

"The popularity of online retail trading platforms is burgeoning and over the COVID-19 alert levels three and four in New Zealand helped spur retail participation to levels never seen before in our sharemarket."