with Bill Chow, Henry Chan, Eugene Cheng and Alfred Lai,
Senior Executives in the Information Technology Division
Bill Chow is Deputy
Head of Information
Technology (IT) and the
head of Exchange Systems
Development & Support. Since
joining the Stock Exchange in
1993, before the establishment of
HKEx, he has played a key role in the
development of the electronic trading
systems for the securities market. Mr
Chow has more than 27 years of
experience in the IT industry. He has a
Bachelor of Science degree from The
University of Hong Kong and a Masters
degree in Electronic Business from the City
University of Hong Kong.
Senior Vice President Henry Chan is the head
of the Cash Clearing Systems Development
& Support. He joined the Hong Kong
Alfred Lai Henry Chan Eugene Cheng Bill Chow Securities Clearing Company, now a
wholly-owned subsidiary of HKEx, in
1992. Mr Chan has more than 25 years of experience in the IT industry. He has a Bachelor of Science degree in
Mathematics from The University of Hong Kong and a Masters degree in Computer Science from the University
of Waterloo in Canada.
Vice President Eugene Cheng is the head of Derivatives Clearing Systems Development & Support. Before
joining HKEx in 2002, Mr Cheng worked with multinational organisations in Hong Kong and other major
financial centres. He has more than 28 years of experience in IT and holds a Masters degree in Business
Administration from Scotland’s Heriot-Watt University and a Post Graduate Diploma in Software Engineering
from Staffordshire University in England.
Vice President Alfred Lai is the head of IT Infrastructure & Operations. He joined HKEx last year. Mr
Lai was with the Stock Exchange in the 1980s, before the establishment of HKEx, and has worked at
a bank, a consulting firm, a computer vendor and a media and entertainment company during his
22 years in the IT industry. He holds Bachelor of Science degrees in Commerce and Computer
Science from Curtin University and Victoria University respectively. Both are in Australia.
Can you give us a brief overview of your department?
Bill Chow: There are two teams in my area, one
for the cash (securities) market trading system,
AMS/3 (Third Generation Automatic Order
Matching and Execution System), and one for
HKATS (Hong Kong Futures Automated Trading
System), the derivatives market trading system. The
two teams are responsible for various software
development and production support activities in
relation to the trading systems and associated
satellite applications for the trading operations of
the markets. We work closely with colleagues in
other areas of HKEx. Our major tasks cover analysis
of business requirements, technical design, software
programming, system testing, vendor management
and various software maintenance support activities
subsequent to a system rollout. We also manage the capacity of our systems in a proactive manner to
ensure that all of our systems have sufficient processing throughput to satisfy growing market demands.
Henry Chan: My team supports all development work in CCASS/3
(the present computer system for the Central Clearing and Settlement
System, or CCASS) including major projects like scripless and nominee
services improvement. The team consists of mainly project managers,
systems analysts and programmers. We also support the day-to-day
running of the system. We usually work normal office hours, but if
something goes wrong outside normal hours, we need to come back
and fix it. It could be midnight or Sunday morning. We have a 24/7
(24 hours a day, seven days a week) system for Investor Participants
(IPs) now so it could be any time. With the 24/7 system, investors can
use the Internet or a telephone to access their IP accounts in CCASS.
The functionality and hardware were upgraded a few months ago.
We simplified the information flow so investors can go straight to
the area they are interested in.
Eugene Cheng: My team is responsible for supporting
the Derivatives Clearing and Settlement System
(DCASS). DCASS was implemented in April 2004 to
replace INTRACS and TOPS, which were operated by
the two derivatives clearing houses, the HKFE Clearing
Corporation (HKCC) and the Stock Exchange Options
Clearing House (SEOCH) respectively. Even though
the two clearing houses are still operated as separate legal
entities with different sets of rules and procedures,
internally all our derivatives clearing function are now
on a single system – DCASS. One of the major initiatives
for 2005 is to redevelop the derivatives market’s risk
monitoring satellite systems on an IT-supported platform
and to improve its functionalities and efficiency.
April 2005 9
Alfred Lai: My department is
responsible for data centre
operations, network operations,
technical services and support, production
change and security administration. Data
centres are running three shifts, delivering round-
the-clock operational services for HKEx’s core
mission-critical systems and other applications.
Network operations are running two shifts, supporting
about 2,700 data lines for Participants and information
vendors, and a similar number of workstations and servers.
The several hundred LAN connections and terminals in the
Trading Hall, and the HKEx corporate network, are also covered.
Technical services and support provide primarily box-level software
support, configuration and evaluation. We also provide capacity and performance management services.
Production change management and security administration is another function we perform. IT is
dealing with roughly 25 changes a week and we have to be very cautious to ensure system availability. This
function helps by assuring all changes made to production adhere to release and security standards and
Bill Chow: They are the gatekeepers.
Alfred Lai: We have a certain overlap between shifts to ensure operations are continued seamlessly. We also
make use of the time slot to communicate important company and IT matters, in addition to using email.
The overlap is normally 30 minutes.
Henry Chan: It is like the changing of the guard.
How has system development and support changed over the years?
Henry Chan: The first CCASS system (CCASS/3’s predecessor) was introduced in
1992. Since then, the functionality has become more complicated and there has
been new technology for some areas of functionality. So some people in my group
become experts in business functionality while others are more focused on newer
technology, and we have a cross-training programme to balance the workload.
Bill Chow: Similar to Henry, over the years we have seen growth in the complexity of system functionality,
an increase in transaction rates and the usage of a larger diversity of technology for different system
components so that cost-effective services can be delivered to brokers. The result is challenges:
integrating different technologies, managing large system throughput, maintaining high reliability,
opening our systems to interface with broker systems. Our systems are more integrated with
broker systems than they were five years ago when AMS/2 was a closed system and on-floor
and off-floor terminals were the only means used by brokers for input of their orders.
Henry Chan: Brokers are more sophisticated in their use of technology and more
demanding of us.
Bill Chow: There are extreme expectations in terms of system reliability,
and we continuously improve our quality assurance practices and
discipline in change management for
the rollout of new systems. There is also
more collaboration with Exchange Participants
and information vendors to ensure robust system
implementation and smooth day-to-day operations.
Coordination and interaction with other parties is more
and more important.
Henry Chan: We try to inform brokers as soon as possible about our plans to change the
system, so they can make the necessary changes early.
Bill Chow: Broker readiness is a key factor now. It has become part of our system design process
that broker requirements and change impacts be analysed at the early stage of system implementation.
We always seek to minimise change for the format and content of our interfaces with brokers systems
so that it will be easy for brokers to cope with new functions and business initiatives introduced by
HKEx without large system modification efforts and long readiness lead times at their ends.
Alfred Lai: Nowadays, network security is always a challenge. We need to be on the alert.
What is your department’s role in the rehearsals that HKEx arranges to prepare for the rollout of a
new system or new system software, and how does the rehearsal process usually work?
Bill Chow: Market Operations and IT commonly put together an information package that describes the
objective, the testing steps and the post-test restoration procedures required to safeguard the ability of broker
systems to resume normal operation the following Monday morning. Rehearsals are normally on Saturday
and with AMS/3, CCASS/3 and other major market systems, there can be quite a lot in a year.
Henry Chan: For major changes, we cannot test everything on one weekend. We need two or even three. It is
quite resource demanding.
Bill Chow: In the summer of 2000, as a part of the measures to effect market readiness for the rollout of AMS/3,
there were a large number of weekend rehearsals during a period of two months.
Eugene Cheng: For DCASS launch, we conducted four rehearsals over a two-
month period. The first two rehearsals were for a selected group of Participants
on two weekends while the final two rehearsals were for market-wide
participation on two other weekends. The key success factor for market rehearsal
is a good script with easy-to-follow steps and procedures that simulate real-
life market conditions.
Bill Chow: For major rehearsals, we need to organise briefings for Participants so that they can have
a good understanding of the overall arrangements to facilitate smooth execution. We also collect
feedback forms after the event to solicit Participant input and identify if there are any follow-up
issues. It takes a big team effort from both IT and Market Operations.
How do you handle staff training, and how do people in your department stay up to
date on developments in IT, HKEx’s systems, etc?
Henry Chan: We try to anticipate projects and whether new skills will be needed
before sending people to training. Also, we have vendor briefings on new products,
new areas of technology. We get information from the Internet, from training
April 2005 11
Bill Chow: Technology is moving fast. There is new technology
emerging every day so we have had to manage, to focus on the areas that
apply to our jobs, to see whether they are relevant to our applications. We
arrange training opportunities for our people to ensure that they can keep abreast
of the latest development for the relevant technologies. There are two different
streams, general skills and technical skills, and we rely on HR (the Human Resources
Department) to arrange general skills training.
Henry Chan: A lot of the staff are pursuing degrees, certifications on their own. They are
studying project management, security, e-commerce, etc. They are very motivated.
Bill Chow: It is a fact of life for IT people that a lot of what we learn will
be outdated very soon. The life cycle of know-how is very short. You look
at common technologies used today compared with five or six years ago
and they are very different. IT people are used to constantly refreshing their
know-how. Knowledge depreciation is fast; it is a very short depreciation
Henry Chan: Everyone is used to upgrading their skills.
Bill Chow: It is a fact of life for IT.
How do your departments contribute to HKEx’s Quality Market
Alfred Lai: From IT Operations perspective, quality is more about stability of
systems, networks and environment. Our objective is to provide the market
with a stable infrastructure to work on. Moreover, when new things go out, we
want to ensure they will not affect the stability of the services that are provided
to the users. We do not want any unpleasant surprises.
Bill Chow: A quality market relies on a stable, reliable, efficient market infrastructure. We leverage the
competency, teamwork and quality culture of our staff to deliver cost-effective IT solutions to support
further growth and development of our markets.
Which of your department’s achievements come to mind first as you look back over the last few
Henry Chan: Making sure our systems are reliable. In the event of unexpected incidents, we will
communicate and address it immediately to restore the service as soon as practical so that the
impact to our Participants and the market are kept to a minimum.
Bill Chow: Keeping all the major market systems stable, reliable and secure.
Eugene Cheng: We successfully launched the DCASS systems without major incident.