Hong Kong Exchanges and Clearing Limited (HKEx) published today (Friday) a paper to provide market participants with information about upgrades of its securities market trading system (AMS/3) and Market Data System (MDS).  The upgrades, which are named AMS/3.8 and MDS/3.8 respectively, are scheduled for completion by the end of 2011.  They will increase the market's efficiency and transparency and pave the way for future growth.

"HKEx is committed to devoting its best effort and resources to the provision of high quality market infrastructure and services for the investing community," said HKEx Chief Executive Charles Li. “The AMS/3.8 and MDS/3.8 upgrades will play a crucial role in maintaining the competitive edge of Hong Kong’s securities market and helping us capture new growth opportunities.”

AMS/3.8 will essentially operate in the same way as the current version of the securities market trading system.  However, the system upgrade will increase the processing capacity over the existing system by about 10-fold to 30,000 orders per second, and reduce average latency to 9 milliseconds, 16 times faster than present.  Market transparency will also be improved as AMS/3.8 will display the 10 best price levels compared to the five best price levels in the current system.  In addition, some legacy system functions will be streamlined to improve Exchange Participants’ operational efficiency. 

Upon the rollout of MDS/3.8, throughput for market data dissemination will be increased to 2,000 stock page updates per second from 1,000 stock page updates per second, the message rate target that the existing system will use at the end of 2010.  As a transitional arrangement, HKEx will disseminate market data at both message rates in the first year following the upgrade.  

HKEx plans to introduce a new set of real-time market datafeed products about six to nine months after the rollout of MDS/3.8 to meet the increasing demand for deeper and faster market data.  Market users will be provided with more data product choices and flexibility in choosing the market datafeed which best fits their needs and reception capability. 

The Information Paper on AMS/3.8 and MDS/3.8 System Upgrades provides Exchange Participants and Information Vendors with an overview of the scope of the enhancements, preparation requirements and implementation schedule of the project. The Information Paper and related reference materials are available on the HKEx website under the Market Operations/ Securities Trading Infrastructure section.

HKEx will publish specifications of the function and technical changes that will result from the upgrades and organise briefings for Exchange Participants and Information Vendors to familiarise them with the changes.  The briefings will start by end of this month.  Market rehearsals will be conducted in the third and fourth quarters of next year as the final preparation for the system upgrade rollout.

Note: AMS stands for Automatic Order Matching and Execution System.

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