Asia’s Exchanges Powered By NASDAQ OMX
NASDAQ OMX technology powers some of the leading exchanges in Asia. In fact, according to their 2008 Annual Report they “provide exchange technology solutions to more than 70 exchanges, clearing bodies and central securities depositories in more than 50 countries”. Specifically, in Asia their footprint can be found at the Hong Kong Exchanges and Clearing Ltd. (HKEX), Australian Securities Exchange (ASX), Singapore Exchange (SGX), the Singapore Commodities Exchange (SICOM), the Indonesia Stock Exchange (IDX), the India Energy Exchange, the Tokyo Commodity Exchange (TOCOM) and the Thailand Futures Exchange. 13 exchanges in all.
The Hong Kong Futures Exchange (now part of Hong Kong Exchanges and Clearing Limited – HKEX) uses NASDAQ OMX CLICK XT and SECUR to support derivatives market trading, clearing and settlement. The exchange was one of OMX’s first clients in Asia and has been using technology from OMX since 1994. In 2004, HKEx began using the SECUR system creating a consistent platform for each stage of the trade life cycle.
As early as 1997 the ASX was also using NASDAQ OMX’s CLICK platform to automate options trading. In October 2006 the ASX replaced its SEATS platform with the NASDAQ OMX trading system. ASX also implemented EXIGO, a central securities depository (CSD) system. Now EXIGO is the beating heart of the Australian market’s settlement infrastructure, providing matching, settlement and depository services to the financial industry. The solution offers real-time irrevocable settlement through its connection with the Reserve Bank of Australia. The ASX now boasts the only end to end platform for multi-asset trading using OMX technology including cash, interest rate, futures, derivatives, commodities, energy and structured products. The ASX also claims that they have reduced the average latency per order from 80 milliseconds to 20 milliseconds.
In 2003 the SGX launched its SGX Quotation and Execution System (SGX QUEST), it too is based on the new CLICK XT platform. SGX QUEST fully integrates both its equities and derivatives trading platforms. The SGX announced March 23, 2009 its intention to Migrate to NASDAQ OMX’s GENIUM Platform.
The Indonesia Stock Exchange launched its JATS-NextG trading platform March 2, 2009. The IDX will be able to trade all its financial products, including equities, derivatives, mutual funds and bonds, on one single platform. The system will afford trading of up to 1,000,000 orders and 500,000 transactions per day a significant upgrade from its previous ceiling of 360,000 orders and 200,000 transactions per day.
That’s not all. On May 7, 2009 TOCOM went live with its Next Generation trading system using OMX as its backbone. The Taiwan Futures Exchange (TAIFEX) signed a Memorandum of Understanding (MOU) March 13, 2009 (in Florida) with the intent to build a new electronic trading platform.
So what are these products NASDAQ OMX is selling? CLICK XT is a “fully integrated electronic trading system to support all trading from traditional securities, derivatives, commodities to cross-border trades, supporting multiple markets simultaneously on a single platform.” CLICK XT provides an open API allowing for easy connectivity to other marketplaces and seamless integration with ISV’s. It maintains a central order book and performs synchronous processing of incoming orders. And it’s matching engine supports several trading methods. CLICK XT also provides connectivity to all the leading price vendors. CLICK XT Trade is their front end trading application. It offers built in charting features and theoretical price calculations among others. You can also create new products and can even white label their front end too.
GENIUM Consolidated Feed is their price feed application. Supporting the TIP protocol for data transmission firms may connect to their data center via a 2MB fixed lease line
SECUR is their automated multi asset clearing platform providing an STP solution minimizing human intervention during the post trade process. It offers a margining feature using a suite of risk valuation models to report exposure in real-time. Different rules can be applied to different products and there is also a give-up feature too. You can even send electronic multi-currency payment instructions.
EXIGO “is a central securities depository (CSD) system designed to support a cross-border environment. It provides the system functionality needed for efficient securities deposits, clearing and settlement including securities issuance, safekeeping and corporate action processing of fixed income, equities and other instrument types”
NASDAQ OMX offers many other products and services around the world with its roots in the US (NASDAQ) and Sweden (OMX) and seems well on its way to dominate the exchange trading application space in Asia. It’s no wonder that Borse Dubai wanted OMX too.
Have you ever had any experience with CLICK XT, SECUR or any of the other NASDAQ OMX products? What did you think of them?