Hong Kong Exchange plans to explore blockchain and cloud in settlement overhaul

Kareyst Lin

The Hong Kong Exchange (HKEX) has laid out plans for a major overhaul of its technological infrastructure.

Topping the agenda will be advances in distributed ledgers - also known as blockchain - and cloud computing, Finextra said in a report on 26 January 2017.

Speaking at a presentation to the Hong Kong media, HKEX Chief Executive Charles Li elaborated of the forthcoming revamp of front-end trading technology in securities markets and in derivatives trading and clearing.

HKEX will roll out a new securities trading platform, Orion, in the fourth quarter of 2017. Orion will replace its 17-year-old heavily-patched predecessor. "The new platform has been developed based on open systems technology to give it the flexibility to support new functionalities and increased capacity requirements in the next decade," said Li.

The roll out will mainly involved changes that the Exchange's host site, with minimal disruption expected for market participants.

In derivatives, HKEX will implement a major upgrade to the Nasdaq-supplied Genium platform for clearing and settlement.

The upgrade is scheduled for completion in the third quarter of 2018. It will see a web-based front end replace the existing workstation software, with links into the system enabled by a central gateway at the Exchange's data centres.

Over the course of the next three to four years, the Exchange will be significantly upgrading most areas of its post trade infrastructure, said Li. "Our Next Generation Clearing initiative is more than a refresh of existing technology. We aim to make significant enhancements in technology, risk models and business processes in this upgrade."