Steady hand at the helm of a trillion-dollar undertaking

Hong Kong Exchanges and Clearing will next Monday double capacity of its trading system to handle 3,000 trades per second and aims to push it up to 50,000 trades per second to fend off competition from overseas exchanges.

Hong Kong is one of several major exchanges upgrading their systems. Japan last week launched a US$145 million system, Arrowhead, which has the ability to handle one trade in about 0.005 second, hundreds of times faster than its old system, which took two to three seconds and was among the slowest in the world.

Outgoing chief executive Paul Chow Man-yiu, the exchange's longest serving boss and the man who built up the local electronic trading and clearing platform, announced the latest technology upgrade plan in his last press conference yesterday.

HKEx's electronic trading system, AMS/3, will handle 3,000 orders per second, or 21.6 million orders in the normal four-hour trading day from Monday.

This is still slower than Japan's new system, but Chow said Hong Kong's system would be scaled up to handle 15,000 orders per second in the second half of next year, bringing it level with Japan's new system.

Ultimately, Chow said Hong Kong's system would be able to handle 50,000 transactions per second.

'We are not in a race with Tokyo's stock exchange which has spent a huge amount of money upgrading its system after a major problem some years ago,' Chow said.