Hong Kong Exchanges & Clearing Ltd. · HKEX:388
Hong Kong Exchanges & Clearing — Investor Presentation (October 2018)
66 slides from Hong Kong Exchanges & Clearing's investor presentation, Oct 24, 2018
Slide 1: Market Data Information Day
24 October 2018 MARKET DATA INFORMATION DAY Market Data Markets Division
Slide 2: Disclaimer
DISCLAIMER The information contained in this presentation is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities or other products or to provide any investment advice of any kind. This presen
Slide 3: Rundown
Rundown 2:30 pm – 2:45 pm Opening Remarks 2:45 pm – 3:15 pm Licensing Arrangement, Fees and Key Marketing Initiatives 3:15 pm – 3:45 pm Reporting, Payment Arrangement and Audit Programme 3:45 pm – 4:15 pm Break 4:15 pm – 4:45 pm Introduction of OMD Platforms, its Features and Technical Arrangement 4
Slide 4: Agenda
AGENDA 1 Opening Remarks – Winnie Poon, Head of Market Data Licensing Arrangement, Fees and Key Marketing Initiatives 2 – Jin Qian, Head of Data Licensing and Marketing, Market Data Reporting, Payment Arrangement and Audit Programme 3 – Lianna Liu, Head of Data Client Audit, Market Data Introduction
Slide 5: HKEX Information Services Limited (HKEX-IS)
HKEX Information Services Limited (HKEX-IS) • Wholly-owned subsidiary of the HKEX • Agents of SEHK and HKFE to deal with market data business HKEX 100% 100% 100% The Stock Exchange of Hong Kong Futures HKEX Information Hong Kong Limited Exchange Limited Services Limited (SEHK) (HKFE) (HKEX-IS) (a.k.
Slide 6: Department Structure
Department Structure Head Winnie Poon Data Connectivity Data Licensing Data Client Audit & Support & Marketing Lianna Liu Arthur Yung Jin Qian - Monitor payments & - Project management - Licensing and marketing contract compliance - Business operations for the of all data products and delivery of ma
Slide 7: Business Model
Business Model • Our fees are regulated by the SFC • Raw data only Datafeeds Securities Data Information Vendors Subscribers • Information Services Company • Banks Derivatives Data • Securities Firm • Mobile Communications Company • TV Broadcast / Media Issuer News End-Users • Proprietary Trading Fi
Slide 8: HKEX Orion Market Data (OMD) Platform
HKEX Orion Market Data (OMD) Platform • Launched in Sept 2013 Securities Market Data Information Vendors Derivatives Market Data HKEX Orion Market Data End Users Issuer News Platform Application Service Providers Index & 3rd Pty Contents Single, integrated platform Multiple asset classes Common mess
Slide 9: OMD Feeds – Securities and Derivatives Markets
OMD Feeds – Securities and Derivatives Markets • Conflated datafeed Standard • 10 price depth • Streaming, low-latency datafeed - Fit for automatic trading applications Premium • 10 price depth • Streaming, low-latency datafeed - Fit for automatic trading applications • Full order information FullTi
Slide 10: Access Methods
Access Methods Direct Connection from Mainland: • HKEX Mainland Market Data Hub (MMDH) in Shanghai HKEX Mainland Market Data Hub (MMDH) HKEX Data Centre (TKO) Direct Connection through TKO: Indirect Connection via: • HKEX Hosting Services • Direct Information Vendors • HKEX authorized third party •
Slide 11: Client Overview
Client Overview • Number of real-time IVs almost doubled in the past 5 years • Since the launch of Stock Connect, number of Mainland real-time IVs increased from 22 in 2014 to 71 in Sep 2018 300 286 Hong Kong Overseas Mainland 250 232 71 214 194 62 200 57 71 161 45 160 149 138 149 16 150 22 133 12 1
Slide 12: Client Overview (Real Time Data Clients)
Client Overview (Real Time Data Clients) • Vendors come from different industry segments • End-Users are mostly EPs Market Data Vendor Market Data End-User Overseas Mainland 8 71 Hong Hong Kong Real-time IV USA By End-Users Kong 144 Total: 286 13 Region 407 Total: 415 Europe 12 Asia 46 Information b
Slide 13: OMD Subscription Status of Direct Connection Clients
OMD Subscription Status of Direct Connection Clients • More than 800 OMD connections serving the market OMD - Cash OMD - Derivatives RTS RTS SF 36 20 DS 47 54 D-Lite SP 58 75 Total no. of Total no. of Connections Connections 565 270 DP SS DF 78 407 60 SS: Securities Standard (12 Connections from MMD
Slide 14: Way Forward
Way Forward Historical Data Products Promote HKEX historical data products through marketing programs and commercial packages Mainland Market Data Hub (MMDH) Enrich the content of Reference Data MMDH and support market Solution participants’ direct access via MMDH Introduce new reference data produc
Slide 15: Agenda
AGENDA 1 Opening Remarks – Winnie Poon, Head of Market Data Licensing Arrangement, Fees and Key Marketing Initiatives 2 – Jin Qian, Head of Data Licensing and Marketing, Market Data Reporting, Payment Arrangement and Audit Programme 3 – Lianna Liu, Head of Data Client Audit, Market Data Introduction
Slide 16: Type of Market Data Licences
Type of Market Data Licences (IV) (EU) (ASP) Application Service Vendor Licence End-User Licence Provider Licence For a company’s For a company’s For a company that distributes external distribution to internal use only data to clients but does not subscribers have responsibility on clients’ usage r
Slide 17: Application Procedures
Application Procedures Pay Deposit / Return One-off Connection Fee duly signed agreement (if applicable) Submit relevant HKEX-IS to issue HKEX-IS to grant Application forms Preliminary Final approval (link) approval and issue Agreement Complete Participate in Technical tests Connectivity Session / (
Slide 18: Market Data Fees
Market Data Fees Licence Fee Connection Fee Subscriber Fee Quarterly fee according to the Quarterly fee according to the types of Monthly fee according to types of Datafeed Products and Market connection to HKEX real-time services subscribed by users Data Licences • Vendor • Direct • Usage reported
Slide 19: Subscriber Fees
Subscriber Fees • Combination of data contents & usage decides the subscriber fees Data Contents Full Book Level 2 Level 1 Full order information Up to 10 price depth Best bid/ask Basic Market Price 5-Depth * Nominal/Last Traded Price Up to 5 price depth Data Usage PC/Terminal Mobile Application Web
Slide 20: Non-Display Usage
Non-Display Usage Securities Market Data Derivatives Market Data • Introduced in 2013 (per month per company) (per month per company) Automated Trading Application HK$20,000 HK$10,000 Derived Data (with Tradable Product) HK$20,000 HK$10,000 Others HK$400 HK$150 (Exempted for EPs) (Exempted for EPs)
Slide 21: Support to Exchange Participants
Support to Exchange Participants • OMD data solutions to ensure EPs’ smooth migration to new trading platforms Securities Derivatives Open Gateway -> Orion Central Gateway Network Gateway -> Central Gateway Privileges for EPs • OMD-SS and OMD-DS licence fee waiver for internal use • Free 2 sets of d
Slide 22: Marketing Initiatives
Marketing Initiatives OMD Free Trial Programme Basic Market Price Service One-Year Fixed Fee Programme Daily Charge Service Programme Fixed Fee Programme on 5 Depths Cash of Southbound Eligible Stocks Enhanced Volume Discount Scheme Promotion Programme on Issuer Information Marketing Programme for M
Slide 23: Marketing Initiatives - OMD Free Trial Programme
Marketing Initiatives - OMD Free Trial Programme • Three months of data • Corporate internal usage only • OMD Premium and FullTick datafeeds for both securities & derivatives markets • Direct connection OMD Real-time Datafeeds • Waived Licence Fee, Connection Fee, Subscriber Fee • Historical Full Bo
Slide 24: Marketing Initiatives - Derivatives Market
Marketing Initiatives - Derivatives Market • Applicable to all Information Vendors 11 regions covered • Mainland China, Australia, India, Japan, Korea, Malaysia, New Zealand, Singapore, Taiwan, Thailand and Vietnam Fee waiver (where applicable) • Subscriber fee for streaming L1 and L2 data services
Slide 25: Marketing Initiatives - Stock Connect
Marketing Initiatives - Stock Connect • Applicable to Information Vendors with subscribers in Mainland China One-Year Fixed Fee Programme • HK$12 million with unlimited streaming L2 subscription for Mainland subscribers for 12 months Fixed Fee Programme on 5 Depths of Southbound Eligible Stocks for
Slide 26: Marketing Initiatives - Others
Marketing Initiatives - Others • Applicable to all Information Vendors Basic Market Price Service • Nominal/Last Traded Price only • Fixed monthly subscriber fee • Visible to public and no login required Promotion on Issuer News Feed • Waived Redistribution Fee for IVs with indirect IIS feed connect
Slide 27: Reach Us at [email protected]
Reach Us at [email protected]
Slide 28: Agenda
AGENDA 1 Opening Remarks – Winnie Poon, Head of Market Data Licensing Arrangement, Fees and Key Marketing Initiatives 2 – Jin Qian, Head of Data Licensing and Marketing, Market Data Reporting, Payment Arrangement and Audit Programme 3 – Lianna Liu, Head of Data Client Audit, Market Data Introduction
Slide 29: Market Data Compliance
Market Data Compliance Financial requirements for Monthly reporting of data usages new Licensees (charged and waived) Deposit and upfront payment Data Client Audit On-site Inspection (by DCA/3rd Party Auditors) On-time payment for data fees Ad-hoc Inspection (license fees and subscriber fees) (Monit
Slide 30: Reporting Obligation
Reporting Obligation Submission of Monthly Subscriber/Individual User Report Vendor End User Agreement Agreement INFORMATION END USER END USER VENDOR (EU) (IV) (EU) Use standard report template customized for you, if the Summary Report doesn’t show your subscribed data products, it’s likely your M
Slide 31: 2018 Payment Initiative – Autopay Benefits
2018 Payment Initiative – Autopay Arrangement Autopay Licence Fees and Subscriber Fees Timely Payment Preset payment date Avoid duplicate or overpayment Benefits Avoid Penalty Interest Preset payment date Build good credit history Time and Cost Saving Effortless payment Less administrative work Miti
Slide 32: 2018 Payment Initiative – Autopay Arrangement
2018 Payment Initiative – Autopay Arrangement Timeline Autopay commencement Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Client Notice Debit Note Debit Note • Direct Debit Authorisation • 4Q Quarterly Fee • 1Q Quarterly Fee • Aug Monthly Fees • Nov Monthly Fees Return Direct Debit Authorisation
Slide 33: 2018 Payment Initiative – Autopay Arrangement
2018 Payment Initiative – Autopay Arrangement Open Limit SIGN AND MAIL / DELIVER Authorisation Form To: HKEX Finance Division 23/F, One Exchange Square 8 Connaught Place Central, Hong Kong Same signature as your bank account signature 33
Slide 34: New Bank Account for Payments
New Bank Account for Payments Payment Methods Autopay Transfer / Wire Deposit HSBC bank account is used for all Market Data payments by all means Bank Account Details Beneficiary : HKEX-IS Name of Bank : HSBC Account No. : 004-741-057566001 SWIFT Code : HSBCHKHH Current Hang Seng Bank account will r
Slide 35: Free Display Units
Free Display Units • 20 FREE Cash & Derivatives Display Units for eligible Exchange Participants (EPs) Securities Market Data Derivatives Market Data SEHK Up to 20 terminal units for each EP HKFE EPs Stock Options SEHK EPs directly connected with HKEX or Participant with licenced vendors Effective M
Slide 36: Free Display Units
Free Display Units Claims submitted via Monthly Reports Claims made on Declaration (hkex.com.hk) Free Units 36
Slide 37: Market Data Inspection Programme
Market Data Inspection Programme New Information Vendors & End Users Initial Inspection Ad-hoc Regular Inspection On-site Inspection (for irregularities) Existing Information Vendors & End Users Recurring Inspection On-site inspections are performed by Data Client Audit Team and independent audit fi
Slide 38: Control Requirements
Control Requirements Marketing Programmes • Mainland Discount Programme Technical control preventing access to Real-time Market Data from • Mobile Application Service outside Mainland China (e.g. Tracking User IP) Market Data Fees waived for Derivatives Products ONLY for specific regions - • New Der
Slide 39: Reach Us at [email protected]
Reach Us at [email protected]
Slide 40: Agenda
AGENDA 1 Opening Remarks – Winnie Poon, Head of Market Data Licensing Arrangement, Fees and Key Marketing Initiatives 2 – Jin Qian, Head of Data Licensing and Marketing, Market Data Reporting, Payment Arrangement and Audit Programme 3 – Lianna Liu, Head of Data Client Audit, Market Data Introduction
Slide 41: Introduction of Orion Market Data Platform (OMD) – Overview
Introduction of Orion Market Data Platform (OMD) – Overview Real-time Market Data Feed OMD-C OMD-D OMD-CC Orion Market Orion Market Orion Market Data - Data - Data – China Securities Derivatives Connect OMD Index IIS News MMDH Complimentary Issuer Mainland feed Information Market Data (not for redis
Slide 42: Introduction of Orion Market Data Platform (OMD) – Overview
Introduction of Orion Market Data Platform (OMD) – Overview Securities Market (OMD-C) Derivatives Market (OMD-D) China Connect (OMD-CC) Conflated D-lite Derivatives Lite One price-depth CCEP only Conflated, Market by price (5 levels) 2 Mbps EP only, 16Mbps SS Securities Standard DS Derivatives Stand
Slide 43: OMD-C and OMD-D
Introduction of Orion Market Data Platform (OMD) – OMD-C and OMD-D Reference Market Instrument Data Status Status Order and Statistics Trading News Trade 43
Slide 44: Introduction of Orion Market Data Platform (OMD) – Overview
Introduction of Orion Market Data Platform (OMD) – Overview OMD Index MMDH IIS • Over 60 indices • Point-of-Presence (PoP) in Shanghai • Trading news • Indices from Hang Seng Data Services, • OMD-C SS • Announcements from HKEX listed China Exchange Services (CES), companies and issuers (e.g., China
Slide 45: OMD On-boarding
Introduction of Orion Market Data Platform (OMD) - On-boarding Two Tests STEP STEP STEP 1 Readiness Test 2 Connectivity Session 3 Production Prerequisite: Prerequisite: • Licence application approved • Readiness Test passed (if needed) • Testing line installed • Production line installed Test to do:
Slide 46: Independent Software Vendor (ISV)
Introduction of Orion Market Data Platform (OMD) – ISV What is Independent Software Vendor (ISV)? • Companies authorized by HKEX-IS to provide certified market data software (i.e. feed handlers) to HKEX-IS’s licensees • Reduces time and cost for getting onboard production market data by using a read
Slide 47: Independent Software Vendor (ISV)
Introduction of Orion Market Data Platform (OMD) – ISV 47
Slide 48: OMD – Test Application
Introduction of Orion Market Data Platform (OMD) – Test Application 48
Slide 49: OMD – Test Application
Introduction of Orion Market Data Platform (OMD) – Test Application Network Connectivity for Readiness Test Production Connectivity Session Application for Readiness Test 49
Slide 50: OMD Connectivity
Introduction of Orion Market Data Platform (OMD) – OMD Connectivity 1 HKEX Primary Site HKEX Backup Site HKEX Host Data Center (HDC) OMD OMD OMD-C OMD-D OMD-C OMD-D Index Index Co-location Client ASP Client 2 SDNet/2 (PCCW, HGC, Wharf T&T) Client ASP Client 50
Slide 51: OMD – Further Information
Introduction of Orion Market Data Platform (OMD) – Further Information 51
Slide 52: Historical Data
Historical Data Order Book / Trade Statistics Reference Data Corporate Documents • Full book • Day-end / Month-end • Stock Master File • Issuer Annual Reports closing data • Trade Tickers File • Stock Static Data • Corporate Documents • Stock Price data • Ex-Entitlement • Daily Quotation notificatio
Slide 53: Historical Data
Historical Data • Available in HKEX website for online subscription: 53
Slide 54: Reach Us at [email protected]
Reach Us at [email protected]
Slide 55: Agenda
AGENDA 1 Opening Remarks – Winnie Poon, Head of Market Data Licensing Arrangement, Fees and Key Marketing Initiatives 2 – Jin Qian, Head of Data Licensing and Marketing, Market Data Reporting, Payment Arrangement and Audit Programme 3 – Lianna Liu, Head of Data Client Audit, Market Data Introduction
Slide 56: The HKEX Data Centre
The HKEX Data Centre Total floor area of 31,400 square meters State-of-the-art purpose built facility, owned and operated by HKEX Designed to meet Tier 4 and LEED Gold Rating specifications Dual incoming utility power from separate substations Dual TBE rooms and risers to support Telco div
Slide 57: HKEX Hosting Services
HKEX Hosting Services Benefit to Users Highly resilient and secure data centre Low latency access to HKEX Securities and Derivative markets Low latency direct HKEX market data feeds Carrier neutral with broad telecommunications carrier access Interactive ecosystem environment supporting el
Slide 58: HKEX Hosting Services
HKEX Hosting Services Innovative Services Among the first exchange pioneering collaborative Hosting Services Ecosystem Low Latency Algorithmic Market Access Trading Real-Time Global Market Data News Feed Risk Management Analytics 58
Slide 59: HKEX Hosting Services
HKEX Hosting Services List of Ecosystem Members Information Vendors Application Service Vendors Financial Technology Service Providers 59
Slide 60: HKEX Hosting Services
HKEX Hosting Services List of Ecosystem Members Network Service Providers 60
Slide 61: HKEX Hosting Services
HKEX Hosting Services Data Centre Services Phase one with around 320 racks available for application Cold aisle containment with supplementary cooling to support 6kVA / rack 24x7 electrical and mechanical facility management and monitoring 24x7 on-site multi-level physical security managemen
Slide 62: HKEX Hosting Services
HKEX Hosting Services Connectivity Services HKEX Service Network (HSN) provides eligible users consolidated connection to HKEX market data, trading and clearing systems Ecosystem Network (ESN) enables users to access services on offer by other ecosystem members Cross Connect (XCN) puts ecosyst
Slide 63: HKEX Hosting Services
HKEX Hosting Services HKEX Service Network (HSN) Estimated Latency Benefit HSN offers consolidated connection to HKEX Systems Latency <= 50µs Round Trip HSN SDNet Core in Hosting Services HKEX Data Centre EP/IV/ASP HKEX systems SDNet Wide Area Network SDNet EP/IV/ASP Latency <= 1.5ms Round Trip EP=
Slide 64: Hosting Services Progress Review
Hosting Services Progress Review Orion Trading Platform launched in February 2018 Derivatives Market started in June 2013. Handling 40% ADV Orion Central Gateway launched in June Service 2014 announced in Securities Trading March 2012 started in December 2012. Handling 20% ADT ADT = Cash Trading Ave
Slide 65: China Connectivity
China Connectivity 20 Exchange Participants connecting to Shanghai and Shenzhen Stock Connect through HSN 65
Slide 66: Reach Us at [email protected]
Reach Us at [email protected] (852) 2211 6447
Hong Kong Exchanges and Clearing — Investor Presentation (October 2018) on 6ix