Hong Kong Exchanges and Clearing Limited (HKEX) signs tech deal with the World’s first electronic stock market, Nasdaq, to upgrade its derivatives market platform by 2018.
Hong Kong Exchanges will use Nasdaq Financial Framework architecture for trading, clearing and real-time risk management technologies.
Nasdaq has been a technological partner of the Hong Kong stock exchange since 1994. This five-year agreement enlists Nasdaq to deliver a new multi-asset trading technology engine, a state-of-the-art multi-asset derivatives clearing engine and a real-time risk management solution (Nasdaq Clearing Engine and Nasdaq Real-Time Risk), which will increase performance, speed, flexibility and resiliency of trading and clearing. The upgrade is expected to be completed by 2018.
HKEX Co-Head of IT Richard Leung says “with Nasdaq technology in our derivatives market, we have been able to provide superior capability and a very reliable market infrastructure, which gives high priority to our clients at our exchange”.
Further, the new platform will include sophisticated risk management and stress testing needs of Central Counterparty Clearing House (CCPs) and exchanges to manage risk of financial derivatives such as equity, FX, commodities and fixed income asset classes, all under the new Nasdaq Financial Framework architecture.
Nasdaq Vice President and Head of Market Technology Lars Ottersgård, says “HKEX is one of the global capital markets’ true innovators; and are committed to the continuous introduction of new technologies to bolster and strengthen the product and services offerings for their clients and partners, along with a rigorous focus on shaping the future of our industry”.
During 2016, HKEX daily turnover of stock options at the operator of the Hong Kong stock exchange was 346,040 contracts, an increase of 21 percent, as compared to 286,230 contracts reported for the same period last year.
In futures and options during May 2017, the exchange recorded an increase of 5.5 percent at 820,726 contracts, against 777,576 contracts recorded in April.
Funds raised on the exchange via initial public offerings (IPOs) by companies in the first five months of 2017 was also saw an increase of 15 percent to AUD 52.19 billion, as compared to AUD 45.64 billion raised during the same five month period last year.
With a total market capitalisation of over AUD 6.3 trillion, HKEX is one of the largest exchanges in the world by market capitalisation of listed companies.
HKEX operates a stock market and futures market in Hong Kong through its wholly owned subsidiaries The Stock Exchange of Hong Kong Limited (SEHK) and Hong Kong Futures Exchange Limited (HKFE).
Nasdaq’s exchange technology, including trading, clearing, CSD and market surveillance systems are in operations in over 100 marketplaces across the Americas, Europe, Asia, Australia, Africa, the Middle East and the Caribbean.
Through its diverse portfolio of solutions, Nasdaq enables clients to plan, optimise and execute its business vision with confidence, using proven technologies that provide transparency and insight for navigating today’s global capital markets.
Known as the founder of the world’s first electronic stock market, Nasdaq’s technology powers more than 85 marketplaces in 50 countries, and 1 in 10 of the world’s securities transactions.
Nasdaq is home to approximately 3,800 listed companies with a market value of AUD 13.47 trillion and nearly 18,000 corporate clients.