Financial regulators conducted an on-site inspection of the Tokyo Stock Exchange on Friday following a system failure that caused a full-day trade suspension earlier this month.

The Financial Services Agency examined the bourse's governing structure and also interviewed officials operating its systems about the details of the shutdown on Oct. 1.

The probe is ongoing and the country's financial watchdog could impose an administrative penalty on the bourse, according to officials.

In the worst outage since the TSE's trading system was fully computerized in 1999, the problem was caused by an issue with the memory functionality of a server in its trading system and a failure of the auto-backup system that was blamed on a settings error, the bourse said.

"We need to assess why its backup system failed," Finance Minister Taro Aso told reporters.

The TSE disclosed Monday that one of the setting specifications was altered in 2015 when the "arrowhead" trading system was updated, but the bourse was unaware of the change as it was not reflected in the manual provided by the system's developer Fujitsu Ltd.

The TSE has said, however, it has no plans to seek compensation from Fujitsu, adding it expects the developer to implement improvement measures.

The bourse will conduct thorough checks of current system settings while running scenario drills with securities companies to test the process for switching to a backup system if a similarly serious technical problem reoccurs.

As one of its preventive measures, the bourse has set up a panel of 25 participants, including from securities houses, investors and system vendors. It aims to create new rules on how to resume trading in the wake of a suspension.

In the first round of discussions held Friday, Tokyo Stock Exchange Inc. President Koichiro Miyahara apologized again for the fiasco. An FSA official attended the meeting as an observer.

"We will ensure stable market operations," Miyahara told the panel.

He explained the panel's purpose is to discuss "how to respond to system glitches, how to make specific rules for suspending and resuming trading, and how information should be disclosed."

The panel plans to compile the new rules next March after conducting a questionnaire survey on other market participants not on the panel.

The TSE will ask around 90 securities companies using the bourse if there is any issue that they predict could occur when resuming trading, as part of efforts to draft new rules and identify possible challenges in the future, according to an official.

Around 3 trillion yen ($28.6 billion) is traded daily on the TSE, according to the bourse. Its market capitalization, with about 3,700 listed companies, is the third largest in the world, behind the New York Stock Exchange and the Nasdaq Stock Market in the United States.

The system breakdown came at a time Prime Minister Yoshihide Suga has pledged to make digitalization a top policy priority and as Tokyo is making efforts to attract more foreign financial institutions and talent in a bid to become a more attractive global financial hub.

The government is aiming to accelerate such efforts since Hong Kong's status as a stable and reliable base in Asia has been hurt by China's tightening of its grip over the semiautonomous territory.

With New York and London dominating the top two spots, Tokyo ranks fourth after Shanghai in the global financial centers index released by a British think tank. Hong Kong and Singapore come in fifth and sixth.

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Tokyo bourse blames setting error for glitch, sets up outside panel