Hong Kong Exchanges and Clearing Limited (HKEx) will upgrade the software used for its derivatives trading system, the Hong Kong Futures Automated Trading System (HKATS), from OMex 15.2 to OMex 17.1 on Monday, 6 October 2003 as part of its continuing efforts to further strengthen its market infrastructure.

OMex 17.1 delivers higher performance and stability to the derivatives trading platform than OMex 15.2, and it is more efficient. It is also a core piece of the DCASS (Derivatives Clearing and Settlement System) project and a prerequisite for the introduction of DCASS.

HKATS will have several new functions as a result of the upgrade, including default account by instrument type, central order size limit and customise tick size. In addition, the Enter Order Window will close automatically after order entry.

The software upgrade will be in phases. Instead of introducing OMEx 17.1 for both the trading and clearing platforms at the same time, the OMEx 17.1 DC version will be rolled out first for HKATS and there will be no change to the current derivatives clearing systems. Later, OMEx 17.1 CL version will be rolled out for both HKATS and DCASS.

Following the implementation of DCASS, more new functions will be available on HKATS. For example, password administration will be more robust, and there will be an automatic give-up feature that allows an Exchange Participant (EP) assign a position to another EP before settlement without completing the paperwork that is currently required.

HKEx has conducted extensive internal and external testing to ensure the readiness of OMex 17.1 DC version, including comprehensive user acceptance tests, integration testing and tests on fallback procedures and failover of the system. In addition, two production readiness tests were conducted in August 2003 with selected EPs. There was also a market-wide rehearsal in early September 2003 with all 117 EPs which trade on HKATS and have installed the new software. HKATS capability of handling three times the peak loading was among the many things checked during the testing.

The results of the rehearsal met the objectives set by HKEx, indicating that HKATS with the OMex 17.1 DC version is ready for implementation and all EPs involved in the upgrade are prepared for the change. Furthermore, all EPs which took part in the exercise said afterwards that they believed OMex 17.1 DC version was ready for rollout. Following successful completion of the testing and the rehearsal, HKEx sought and received the approval of the Securities and Futures Commission to upgrade the HKATS software to OMex 17.1 on 6 October 2003.

The implementation of the OMex 17.1 DC version for HKATS will be followed by a two-week stabilisation period as a prudent measure. During that period, HKATS running on the OMex 15.2 version will be on standby as a backup. HKEx has arranged for onsite support from the software vendor during critical phases of the rollout and prepared contingency plans in the unlikely event that there is an incident that requires fallback to HKATS with the OMex 15.2 software.