HKEx delays launch of derivatives clearing

The Hong Kong Stock Exchange (HKEx) has delayed the launch of its Derivatives Clearing and Settlement System (DCASS) until "early in the second quarter of this year", according to a report released by exchange officials, reports Risk’s sister publication, Trading Technology Week .

Officials had expected the clearing and settlement system to be live by the end of this month.

"The slight shift in the timetable allows more time for the market to get ready for the DCASS launch," an exchange spokesperson said. However, the spokesperson declined to provide further information.

DCASS will replace the two futures and options settlement systems currently used by the exchange. HKEx operates the Intracs/400 system, which is run by the HKFE Clearing Corporation and the Traded Options System stock options clearing system operated by the SEHK Options Clearing House. The decision to integrate the platforms was made when the two exchanges were brought together under the HKEx banner in March 2000.

HKEx officials conducted what they term a "production readiness test" with 35 elected participants in January 2004. A "market rehearsal" was conducted last month with the involvement of all HKEx exchanges and clearing houses that will use DCASS.The report also revealed that HKEx is “studying the possible consolidation of the networks of our trading and clearing systems, the market data feed and other systems to reduce our costs and the costs of our participants without sacrificing service quality”. The exchange spokesperson said the study is ongoing but declined to provide further details.