Hong Kong exchange ponders blockchain in settlement overhaul

Hong Kong exchange ponders blockchain in settlement overhaul

The Hong Stock Exchange has laid out plans for a major overhaul of its technology infrastructure, culminating - inevitably - in a pledge to explore the potential of blockchain technologies and cloud computing in the post-trade arena.

Speaking at a presentation to local media, HKEX chief executive Charles Li elaborated on the forthcoming revamp of front-end trading technology in securities markets and in derivatives trading and clearing.

He says the Exchange will roll out a new securities trading platform - Orion - in the fourth quarter, replacing 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," he says. Roll out mainly involves changes at 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 - scheduled for completion in Q3 2018 - will see a Web-based front end replace the existing workstation software, with links in to the system enabled by a central gateway at the Exchange's data centres.

Looking ahead, Li says that over the course of the next three to four years the Exchange will be significantly upgrading most areas of its post trade infrastructure.

"Our Next Generation Clearing initiative is more than a refresh of existing technology," he says. "We aim to make significant enhancement in technology, risk models and business processes in this upgrade."

Topping the agenda will be advances in distributed ledgers and cloud computing: "In 2016 we started to look at the role new technologies (such as cloud computing and distributed ledger) can play in our future development and this will continue in 2017 when we will determine our NextGen roadmap."

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