Osaka Securities Exchange plans switch to OMX

Osaka Securities Exchange plans switch to OMX

The Osaka Securities Exchange plans to replace its existing Fujitsu trading system with technology developed by Swedish firm OMX, according to a report by Japanese daily Yomiuri Shimbun.

The OMX system, which will be used to handle equity options and derivatives transactions, is capable of processing more than ten-times the volume of orders of the incumbent Fujitsu platform.

The move follows last month's decision by the Tokyo Stock Exchange to replace a Fujitsu-based system with technology from Hitachi in an effort to boost trading capacity following a series of embarassing computer failures at Japan's largest securities market.

The OMX system will be the first developed by a foreign firm to be used on the Japanese securities and stock exchange markets, says Yomiuru Shimbun. The daily says unique Japanese transaction requirements for preventing short-term fluctuations in prices have in the past discouraged trading venues from using foreign kit in favour of lower-capacity homegrown systems.

Under the current OSE and TSE systems, after securities firms place orders to sell and buy stocks and other financial products, it takes about five to 10 seconds for the firms to receive notices that the markets have accepted their orders. However, it will take less than a second for the OMX system to return the notices.

The entire OSE trading system will be switched to the new OMX platform later this month says the report.

Update In an embarrassing post-script, OMX suffered its owm one-hour trading outage Thursday morning due to an unexplained technical glitch.

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