IBS Journal March 2015
ASX opts for Cinnober for trading systems overhaul
Swedish trading systems vendor, Cin- nober, has picked up a deal with Austral- ia Securities Exchange (ASX) to roll out its flagship Tradexpress system as part of the exchange’s major technology revamp. The new software will support the ASX Trade 24 derivatives market and the ASX Trade equities market. On the derivatives side, Cinnober will replace a propriety system which originates from the Sydney Futures Exchange, which merged with Australian Stock Exchange in 2006 to become ASX, whilst on the equities side it will oust a platform from Nasdaq OMX. Following the upgrade of its trad-
ing platforms, ASX will move to replace its post-trade services, with plans to install a new cash market clearing facility and cen- tral securities depository (CSD) infrastruc- ture. The system selection and design phas- es will take place in 2016. Veronica Augustsson, CEO of Cin-
nober, says that Tradexpress will create a combined platform for ASX members, ‘so users can benefit from having one single interface to the exchange, and access the system and have all of their trading instru- ments in one place’. Cinnober has been engaged in discus- sions with ASX over the last ten months, says Augustsson, with the selection phase occurring over the course of the last six. The incumbent Nasdaq OMX was one of the suppliers competing for the deal ‘as well as other international vendors’, but Cinnober emerged as the preferred part- ner. Augustsson suggests that Cinnober’s delivery track record was one of the main factors, the vendor claims to have never delivered a project late in 15 years. ‘It’s very important because it is one of the key cri- teria why we are selected for projects,’ she believes.
ASX will become one of Cinnober’s
largest customers with a market capitali- sation of around AU$1.5 trillion ($1.2 tril- lion) and over 2000 members. Augustsson describes it is a ‘huge’ win for the vendor. ‘We have got a really big tier-one customer on the trading side and we are also replac- ing one of our rivals’ biggest customers,’ she remarks. ASX’s relationship with Nasdaq OMX
dates back to 1997 (when it was Aus- tralia Stock Exchange), with this further
extended in 2010 to include the roll-out of the vendor’s Genium Inet system. This coincided with talks of a merger between ASX and Singapore Exchange (SGX), which would have seen Nasdaq OMX most like- ly used as the platform of choice given it was installed at both venues. However, the merger failed to materialise. Augustsson says that the timeline for
the project is ‘aggressive’, there will be the kick-off stages commencing in the next few weeks, and she anticipates the soft- ware development phase will be complet- ed this year. ‘Then it will depend on the market readiness when they can actual- ly go live,’ she adds. ASX has advised mar- ket participants that the entire project will last between 18 and 24 months. Cinnober will work directly with ASX to deliver the project. ‘I think one of the complexities is that ASX trades a lot of different instru- ments, and all of them have different fla- vours of functionality. Otherwise, it’s more or less our standard trading system that will be adapted for the Australian market,’ Augustsson adds. On other fronts, ASX has also been engaged in a number of other technology
ASX, Sydney ©JeremyR, Commons Wikimedia
modernisations. In late 2014, it complet- ed a multi-year overhaul of its back office corporate actions and data management infrastructure. This initiative was under- pinned by the EDM offering from US-based vendor Goldensource, supplemented by a new middleware layer from Tibco and a new data warehouse. Tibco has extended its relationship with ASX, picking up a deal to install a new market monitoring solu- tion, to coincide with the Cinnober imple- mentation.
IN BRIEF
Indonesian authorities are mooting the creation of an Islamic ‘mega bank’. The idea centres on the merger of the Islamic banking arms of three state-owned banks – Bank Syariah Mandiri (BSM), Bank Rakyat Indonesia and Bank Negara Indonesia (BNI). The Shari’ah-compliant banking unit of Bank Tabungan Negara (Bank BTN) might also be included in the merger, it is understood. Indonesia has the world’s largest Muslim population, but its Islamic banking seg-
ment comprises just 5.5 per cent of the country’s overall banking market, according to Ernst & Young’s World Islamic Banking Competitiveness Report 2014/15. The view on the ground is that the undertaking will incur significant costs, but
if the government is serious about the creation of this mega bank, the issue of costs will not deter it. From the technology point of view, who might benefit or lose out from the merg-
er? BNI relies heavily on Misys’ products in the treasury and capital markets (TCM) space, both at home and abroad. TCS Financial Solutions is another major suppli- er to the bank with its Bancs core system used for Islamic and conventional finance operations. Bank BTN is a long-standing user of the SIBS core banking system from regional supplier, Silverlake Axis, and the Opics system from Misys for TCM. Bank Rakyat Indonesia runs Temenos’ T24 for core banking and CCK’s Guava for TCM. Meanwhile, BSM, Indonesia’s largest Islamic bank, has been working over the last five years on the implementation of T24, with the assistance of Temenos’ local partner, Anabatic Technologies.
© IBS Intelligence 2015
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