Highlights of HKEx Developments
Exploration of New Financial Products / Services and Review of Existing Products / Services
Volatility Index-related Products (In Progress)
HKEx and an index company have solicited comments from market participants regarding the volatility index calculation methodology and are working on adaptations relevant to the Hong Kong market
Dividend Point Index Futures
HKEx is studying the feasibility of introducing futures contracts based on the HSI Dividend Point Index and HSCEI Dividend Point Index, which were introduced by Hang Seng Indexes Company Limited on 12 July to provide the market with indicators to track cash dividends from constituent stocks of the Hang Seng Index and the Hang Seng China Enterprises Index respectively. HKEx will make a further announcement if it decides to introduce futures contracts based on the dividend point indices.
T+2 Finality for Stock Exchange Trades and Settlement Instructions
The consultation conclusions will be published in the third quarter this year.
Automation of Stamp Duty Reporting and Payment
HKEx held three EP seminars on the subject in the last week of April with a total of 627 attendees. All 465 trading EPs confirmed that they would complete any system and operational changes they needed to make before the end of July. HKEx plans to organise practice sessions and a market rehearsal in August for EPs’ staff to familiarise themselves with the new stamp duty arrangement. The automation is scheduled to be implemented in September, subject to market readiness.
Derivatives Market System Capacity and Technology Upgrade
The capacity and technology upgrade of HKATS and DCASS is making good progress. The plan is to roll out the platform and infrastructure upgrade – Phase 1 – by the fourth quarter this year to increase the order capacity of HKATS from 21,000 order book changes/second (OBC/S) from the original of 8,100 OBC/S. The design of the DCASS software will be enhanced in Phase 2 and rolled out in mid-2011.
Securities Market System Capacity and Technology Upgrade (also known as AMS/3.8 and MDS/3.8)
This project aims for 10-fold improvement over the existing securities trading system capacity to achieve an initial capacity of 30,000 orders per second (scalable to 150,000 orders per second if necessary), as well as an average order processing latency of nine milliseconds, to deliver significant advancement in the capacity and performance of the securities market infrastructure.
An exposure paper will be published for Exchange Participants and information vendors at the end of the third quarter of this year for their planning and preparation.
The project plan calls for implementation by the end of 2011.