190 likes | 395 Views
Asian Financial Services Technology Conference Exchanges & Technology. Lawrence Fok Deputy Chief Operating Officer Hong Kong Exchanges & Clearing Limited 11 September 2001. Macro Factors Reshaping the Global Financial Market. Globalisation Technological advances.
E N D
Asian Financial Services Technology ConferenceExchanges & Technology Lawrence Fok Deputy Chief Operating Officer Hong Kong Exchanges & Clearing Limited 11 September 2001
Macro Factors Reshaping the Global Financial Market • Globalisation • Technological advances
The New Financial Landscape A buyers’ market driven by investors’ needs • 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
The New Financial Landscape (cont.) • the most liquid market • the largest pool of investors • competitive compliance costs • a level playing field Issuers’ preference
Market Reforms for Hong Kong 1999/2000 Budget Speech of the Financial Secretary • Demutualisation and Merger of Hong Kong’s Exchanges and Clearing Houses • Enhancement of the Market Infrastructure
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 and clearing houses
Cardinal Principle To act in the interest of the public, having particular regard to the interests of the investing public. - Merger Ordinance -
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
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 Securities Market
Post Merger Systems Infrastructure (2000) Trading Clearing Securities AMS/3 (N) CCASS Stock Options TOPS TOPS FuturesHKATS (N) OCC Derivatives Trading Integration (August 2001) Trading Clearing Securities AMS/3 CCASS Stock Options HKATS TOPS FuturesHKATS OCC Derivatives Clearing Integration (2002) Trading Clearing Securities AMS/3 CCASS/3 (N) Stock Options & Futures HKATS DCASS (N) (N) : new or upgrade
Target Clearing Infrastructure Product Specific Clearing Processing • CCASS for Securities • DCASS for Derivatives
CCASS Upgrade Project (CCASS/3) Features • Multi-Market Structure • Variable Settlement Cycles (T+x) • Extended Trading Hours Functional Architecture Upgrade
CCASS Upgrade Project (CCASS/3) Features Technical Architecture Upgrade • Database Segmentation • Middle-Tier • User Access Options • Browser • API • SWIFT (GSTPA) • New CCASS Network (FinNet)
Derivatives Clearing and Settlement System (DCASS) • Integrated Clearing System for Futures and Stock Options • A Seamless Trading and Clearing Derivatives Platform • OM SECUR – Clearing • OM Click - Trading
Common Risk Management System • Integrated Risk Profiles • Cross Product Assessment • Cross Participants Analysis • Real/Time Monitoring
Common Risk Management System • Common Collateral Pool • Multi-Currency Cash • Non-Cash Securities • Consolidated Pay and Collect
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.
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