Taiwan Stock Exchange (TWSE) has successfully rolled out its second generation FAST (Fully Automated Securities Trading) system, replacing all existing trading platforms. The new proprietary system boosts TWSE's trading capacity by three times, reduces latency by seventeen times and doubles system efficiency.
It greatly enhances the capability of the Taiwan capital market in preparation for the adoption of continuous trading in 2015.
All listed products, including warrants, ETFs, REITs, Taiwan Depositary Receipts and securities have now been successfully migrated to the new system.
Key features of the second generation FAST system include:
- Tripling of daily order throughput from existing 6.5 million transactions to 20 million transactions
- Tripling of ability to handle individual securities and warrants from the existing ability to simultaneously trade 1,000 securities and 9,600 warrants to the ability to simultaneously trade 3,000 securities and 30,000 warrants
- Reducing average door-to-door order latency from 50 milliseconds to less than 3 milliseconds
- Adoption of multiple international order management standards, including FIX and compressed FIX/FAST formats
- Enhanced system flexibility and ability to cater for future rules change and technology upgrades
Mr. Michael Lin, President of TWSE, said “Over a development period of two years, our development team undertook stringent quality assurance, stress testing, contingency planning, parallel-testing and compliance work to ensure the new system’s integrity, reliability and performance. The network infrastructure, data dissemination, trading engine, risk management and monitoring functions of the new system conform to the latest international standards and will better meet the demands of changing regulatory requirements and the rapid expansion of day trading volumes in the Taiwan market.”
The Taiwan Financial Supervisory Commission recently introduced regulatory changes that allow investors to conduct day trading and allow issuers to introduce innovative products such as commodity ETFs, inverse/leverage ETFs, and potentially, multi-currency prod potentially, multi-currency products to the Taiwan market.
During the first half of 2014, foreign institutional investor participation in the Taiwan market exceeded 35%, the highest level since the global financial crisis. The benchmark TAIEX index also outperformed regional markets due to rising demand for consumer electronics suppliers, bio-tech and leisure & tourism stocks.
Mr. Lin said: “Higher trading speeds and compatibility with international order management protocols will make it much easier for foreign investors to access the Taiwan market. The timely rollout of the 2nd generation trading system is very much in line with our broader future business development needs. It will also help prepare TWSE to take advantage of recent trends, such as cross-border electronic trading, and offer new products and services for the benefit of local and international participants.”