Exchange innovation of the Year: TFEX clearing and trading upgrade

Exchange innovation of the Year: TFEX clearing and trading upgrade

The Thailand Futures Exchange epitomises the growing international ambitions of regional exchanges with its investment in a new trading and clearing platform. 

The new systems, developed in conjunction with Cinnober on the trading side and the Korea Exchange in clearing, provide cross-asset class trading efficiently and can support multi-currency and multi-market trading.

The new trading platform allows for low-latency execution of numerous asset classes of underlying. In addition it will enable a shorter time to market to introduce new products and brings significantly higher capacity. 

But it was the clearing system that won the judges praise in particular. The TCS clearing system is a customised platform based on the Exture+ clearing system currently used by KRX. 

TCS was designed and implemented to be a consolidated clearing and settlement system operational across both the cash and derivatives markets.  

The project was divided into two phases: Phase 1 for derivatives and Phase 2 on the cash market.  

As a result, the full development cycle, which included a full analysis of requirements, design, development, testing and go-live had to be repeated.  

“It was a real challenge for all the developers as well as for the business users who participated in this project to go through all of these procedures without a break. The efforts and energy that were put into this project were not just double but exponential,” says Honghee Shin, executive director, global business development at KRX. 

Shin says that one of the key challenges was that SET was already operating a clearing and settlement system for its cash and derivatives markets. Therefore the existing users, including external users, were used to a certain way of doing things and were comfortable using the legacy system.  

“We had to satisfy both the adverse reaction of these users as well as meeting their expectations for the new system, which we think is one of our key strengths. We acknowledge that each market has its peculiarities and we try to fully respect them, customising and localising our solutions,” says Shin. 

TCS was built around the needs of the Thailand Exchange. Innovations included the CSX module, a FIX-based functionality that interfaces with internal and external systems; a fully-customised position ledger; a flexible approval structure that minimises the chances of errors or malicious usage and a native web portal to increase ease of access for members. 

KRX is now looking to work with other exchanges to implement its technology on a collaborative and bespoke basis. 

“We can set up an exclusive clearing system solely for a derivatives market, cash market or both markets according to our clients’ demands,” says Shin. 

“If our customer has their own market and business practices, we adjust our KRX clearing system to them, so it can accomodate the previous system’s practices seamlessly. 

 “Lastly, our clearing system has the ability to efficiently interact with other systems in different protocols by using CSX, which can accommodate bilateral and multicast communication.” 

KRX offers a full suite of IT products across the exchange infrastructure from post trade for derivatives to trading systems for cash markets and surveillance systems and beyond. 

For more information, contact:

Honghee Shin

Executive Director, Global Business,

+82 2 3774 4202

Sergio Lee

Senior Manager, Global Business Development  

+82 2 3774 4214

Hugo H. Yoo

Deputy Manager, Global Business Development  

+82 2 3774 4215 

Most Popular

Thought Leaders

ULLINK tracks the changes to order routing

The technology firm thinks Mifid II will breathe new life into systematic...

SmartStream at forefront of reconciliations evolution

Tech firm said role of reconciliations is changing and now provides a...

SmartStream RDU gears up for Mifid II challenge

SmartStream won the FOW Award for best new technology product in both the trade...

Trading in the post-Mifid II environment

Itiviti was the winner of the FOW award for best new technology product for...

Total Return Futures - a real-life example for futurisation

Eurex won the FOW Prop Traders' exchange of the year award