1 asian financial services technology conference exchanges & technology lawrence fok deputy...
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1
Asian Financial Services Technology Conference
Exchanges & Technology
Lawrence Fok
Deputy Chief Operating Officer
Hong Kong Exchanges & Clearing Limited
11 September 2001
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Macro Factors Reshaping the Global Financial Market
Globalisation
Technological advances
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The New Financial Landscape
real-time, any-time trading
ready access to investment information
transparent and liquid secondary market
best price available
low transaction costs
one-stop trading & settlement
a level playing field
A buyers’ market driven by investors’ needs
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The New Financial Landscape (cont.)
the most liquid market
the largest pool of investors
competitive compliance costs
a level playing field
Issuers’ preference
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Demutualisation and Merger of Hong Kong’s Exchanges and Clearing Houses
Enhancement of the Market Infrastructure
Market Reforms for Hong Kong 1999/2000 Budget Speech of
the Financial Secretary
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Demutualisation and merger formally completed on 6 March 2000
Company limited by shares Listed on the Stock Exchange in June 2000
to broaden ownership Operates all cash and derivatives markets a
nd clearing houses
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Cardinal Principle
To act in the interest of the public, having particular regard to the interests of the investing public.
- Merger Ordinance -
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Enhancement of the Market Infrastructure
A Steering Committee on the Enhancement of Financial Infrastructure (SCEFI) chaired by the Chairman of the Securities and Futures Commission
To Study and Recommend the Necessary Improvements to the Financial Infrastructure of Hong Kong
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SCEFI Recommendations
Initiatives Objectives
Build Securities and Derivatives Provide the Foundation for Implementation of Network (SDNet) Interactive/Message-based Interfaces and
Web-enabled Access, and Eventual Consolidation of All Trading and Clearing Networks
Upgrade Securities Clearing to Upgrade CCASS Architecture to Enable Message- Open Architecture Ready based Interface, Gateway and Open Access
Achieve Single Clearing Arrangement Implement Single Clearing Arrangement Building Blocks, such as Consolidated Clearing Account Structure, Unified Money Settlement, Portfolio-based Risk Management
Enable Straight Through Processing Implement the Straight Through Processing Building Blocks, such as TFM, TRS, CBI
Consolidate Derivatives Clearing Provide A Single Clearing Platform for Derivatives Into A Single Platform Products
Realise Scripless Securities Market Convert Hong Kong To A Scripless SecuritiesMarket
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Post Merger Systems Infrastructure(2000) Trading Clearing
Securities AMS/3 (N) CCASSStock Options TOPS TOPSFutures HKATS (N) OCC
Derivatives Trading Integration (August 2001)Trading Clearing
Securities AMS/3 CCASSStock Options HKATS TOPSFutures HKATS OCC
Derivatives Clearing Integration (2002)Trading Clearing
Securities AMS/3 CCASS/3 (N)Stock Options & Futures HKATS DCASS (N)
(N) : new or upgrade
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Target Clearing Infrastructure
Product Specific Clearing Processing
CCASS for Securities DCASS for Derivatives
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Multi-Market Structure Variable Settlement Cycles (T+x) Extended Trading Hours
CCASS Upgrade Project (CCASS/3) Features
Functional Architecture Upgrade
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CCASS Upgrade Project (CCASS/3) Features
Database Segmentation Middle-Tier User Access Options
Browser API SWIFT (GSTPA)
New CCASS Network (FinNet)
Technical Architecture Upgrade
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Integrated Clearing System for Futures and Stock Options
A Seamless Trading and Clearing Derivatives Platform
OM SECUR – Clearing OM Click - Trading
Derivatives Clearing and Settlement System (DCASS)
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Integrated Risk Profiles
Cross Product Assessment
Cross Participants Analysis
Real/Time Monitoring
Common Risk Management System
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Common Collateral Pool Multi-Currency Cash Non-Cash Securities
Consolidated Pay and Collect
Common Risk Management System
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Securities Markets STP
The aim of STP is to reach finality of
securities transactions within the
required market time-frames in an
automated market infrastructure.
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Securities Markets STP
Why STP? Settlement Risk Reduction Settlement Cost Reduction Market Efficiency
How STP? Information Exchange Standards (ISSO 15022) Uniform Technology Infrastructures Market Participants Cooperation
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Q & A
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