By Shaun Drummond
ASX Ltd chief information officer Tim Thurman says the mammoth overhaul of the ASX's systems is unique in his long experience of exchange technology because everything is being replaced – including systems that are nearly 30 years old.
On Thursday the bourse announced the third vendor on the initial two-year phase of the upgrade, Nasdaq OMX, would supply the replacement for five separate systems that calculate the exchange's exposures in its clearing houses.
ASX chief information officer Tim Thurman has an extra 75 contract staff on top of his 200 IT staff on site every day to upgrade its systems.Credit: Dallas Kilponen
"I have worked in dozens of exchanges but this is unique because we are changing everything," Mr Thurman said. "Everything had to go – some systems are 28 years old but they have never had a problem, so it has taken some convincing to justify the changes."
The new real-time risk system, Sentinel – built by Australian software developers in Sydney and acquired by Nasdaq – will be in place in a few weeks' time. But it will be just the first phase of at least three in the upgrade of the risk management technology.
"Right now we have several ways of calculating risk. The key goal for us was bringing these risk calculations to one platform – that creates a lot of efficiencies," he said.
The ASX wouldn't disclose how much it is spending on the new risk systems.
At the same time, the exchange is replacing its derivatives and equities trading platforms and market monitoring systems over the next 18 months at a total cost of about $35 million. When it announced the overhaul at its half year results in February, it said Sweden's Cinnober Financial Technology was doing the trading systems while US company TIBCO is supplying the monitoring systems.
The trading, monitoring and risk systems, in turn, is just the first phase of a four to five year project to upgrade all of the ASX's chief technology.
On top of his 200 IT staff, Mr Thurman now has 75 contract staff working full time on the changes. He has also poached extra permanent staff who had been working on some of the big banks' major core banking system upgrades in recent years.
The one area ASX is not upgrading yet is the equity clearing system itself. It has put that on hold until the government decides whether to open share clearing to competition. The Council of Financial Regulators – including ASIC, the Reserve Bank, Treasury and APRA – is now due to report its recommendations to government following industry consultation that began in February.
In March, small rival bourse Asia Pacific Exchange announced it was using Nasdaq OMX's trading technology to run its exchange.