Transcript Clearing Infrastructure of Hong Kong’s Securities and

Clearing Infrastructure of
Hong Kong’s Securities and
Derivatives Market
Mr KC Kwong
Chief Executive
Hong Kong Exchanges and Clearing Limited
1 June 2001
Hong Kong Securities Institute Luncheon
Demutualisation & Merger
HKEx Corporate Structure
HKEx
Securities Markets
Derivatives Markets
Futures
Stock Options
Trading
SEHK
HKFE
SEHK
Clearing
HKSCC
HKCC
SEOCH
HKSI Luncheon 1 June 2001
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Market Infrastructure
Post Merger Systems Infrastructure
Securities
Stock Options
Futures
Trading
Clearing
AMS/3
TOPS
HKATS
CCASS
TOPS
AS/400
Derivatives Trading Integration (2001)
Securities
Stock Options
Futures
Trading
Clearing
AMS/3
HKATS
HKATS
CCASS
TOPS
AS/400
Derivatives Clearing Integration (2002)
Securities
Stock Options & Futures
HKSI Luncheon 1 June 2001
Trading
Clearing
AMS/3
HKATS
CCASS
DCASS
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Market Infrastructure
Clearing Infrastructure for Future
CCASS for Securities
 DCASS for Derivatives
 Common Risk Management System (CRMS)
 Common Collateral Management System (CCMS)

HKSI Luncheon 1 June 2001
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SWIFT
Open Messages Standard
Third party
Interfaces
Common
Gateway
API based
Cash Market Participants
Derivatives Market Participants
Overseas Participants
Internet
Vision of Common
Thin Client / Browser Based
Access and Network
AMS/3
CCASS/3
HKATS
– OM CLICK
Technical Architecture
- Open Connectivity
- De-coupled Subsystems
DCASS
– OM SECUR
Functional Architecture
- Multiple Market Infrastructure
- Extended Operation Hours
- Flexible Settlement Operations
RMS/S
Systems
Overview
HKSI Luncheon 1 June 2001
RMS/D
CRMS
Common Risk
Management
And Collateral
Management
CCMS
Payment System
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FinNet
GSTPA
Common
Access
Point
Market Infrastructure
CCASS Upgrade Project (CCASS/3) Features
Technical Architecture Upgrade

Database Segmentation

Middle-Tier

User Access Options
 Browser
 API
 SWIFT (GSTPA)

Message Based Data Flow

ISO 15022 Compliance

New CCASS Network (FinNet)
HKSI Luncheon 1 June 2001
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Market Infrastructure
CCASS Upgrade Project (CCASS/3) Features
Functional Architecture Upgrade
Multi-Market Structure
 Variable Settlement Cycles (T+x)
 Extended Trading Hours

HKSI Luncheon 1 June 2001
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Market Infrastructure
Single 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
HKSI Luncheon 1 June 2001
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Common Risk Management System
Integrated Risk Profiles
 Cross Product Assessment
 Cross Participants Analysis
 Real-Time Monitoring

HKSI Luncheon 1 June 2001
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Common Collateral Management System

Common Collateral Pool
 Multi-Currency Cash
 Non-Cash Securities
HKSI Luncheon 1 June 2001
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Benefits to Market
 Enhanced
market infrastructure
 More flexible system architecture
 Convergence with international standards
 Better and integrated risk management
 Better support for product and market
developments
HKSI Luncheon 1 June 2001
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Benefits to Market (cont’d)
 Facilitate
strategic alliance with major
international financial centres
 Increase investment product variety
 Improve system and operational efficiency
 Improve risk management
 Support future major market initiatives
HKSI Luncheon 1 June 2001
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Benefits to Market Participants
 Reduce
operating costs
 Increase back office efficiency
 Enhance risk management through real time
access to information
 More business opportunities
HKSI Luncheon 1 June 2001
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Key Milestones
 All
projects to complete by second quarter
of 2002
 Street-wide tests for different systems
between end 2001 and mid 2002.
 First market briefings in June 2001.
HKSI Luncheon 1 June 2001
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Conclusion
Q & A
HKSI Luncheon 1 June 2001
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