The computer meltdown of the Hang Seng Index last Friday was a wake-up call for the government and Securities and Futures Commission. A glitch meant Hang Seng Indexes, a Hang Seng Bank subsidiary that calculates the market's benchmarks, could not accurately calculate the blue-chip index or the China Hang Seng China Enterprises Index for half an hour. Nor could the Hong Kong Exchanges and Clearing's trading system update indices for traders. Fortunately, no major losses were reported from the breakdown. But the incident may well be a warning that regulators need to look at whether closer monitoring of the index compiler is required. Hang Seng Indexes is not regulated by either the SFC or the HKEx, despite the important role it plays in the market. It has calculated the Hang Seng Index since 1969, during which time the index has become one of most widely recognised in the world. It also calculates other indices that trace the performance of China stocks and small companies. The exchange pays a licence fee to use the index and to develop products such as Hang Seng Index futures. Investment bankers also pay the firm a fee that allows them to develop derivative products linked to the Hang Seng Index. But the compiler itself does not need a licence from the SFC. Its parent Hang Seng Bank is regulated by the Hong Kong Monetary Authority but it is not a stock market regulator, and is unlikely to put much emphasis on surveillance of the index compiler. Last Friday's incident showed how things can go wrong. Part of the problem is that there are far too many derivatives linked up with the indices, which are affected by any breakdown. The index compiler was quick to trace the problem and the benchmark resumed normal operations after 32 minutes. Hang Seng Indexes said on Sunday that the source of the interruption had been traced, and it had taken steps to solve the problem. But we have to ask whether this is good enough. What happens if something goes wrong again? As the market expands, we can no longer afford to see wrong calculations of indices. This is not to say the SFC or the HKMA must add very tough regulation on the index compiler immediately. But it is also time to see if regulation is needed to ensure the smooth operation of the market. Another departure at HKEx Hong Kong Exchanges and Clearing is farewelling another high flyer. After the retirement of former chief executive Paul Chow Man-yiu last week, the bourse's chief financial officer Archie Tsim Tak-chee has resigned and will leave in March. Tsim joined the exchange in October 2004 and was a regular at the annual result press conference. The exchange has not said where Tsim is going but announced it would form a selection committee to find a replacement. Watch this space for succession news.