The second phase in the transfer of Nasdaq technology and consultancy services to Borsa İstanbul has been completed.
In the course of the strategic partnership agreement signed between Borsa İstanbul and NASDAQ, the BISTECH Technological Transformation program was initiated on January 20, 2014. Within the context of the program, the Genium INET software and other related technological components, which are being used in leading exchanges worldwide, are revised and redeveloped in conformity with the Turkish capital markets legislation.
BISTECH Technological Transformation, which consists of numerous large-scale projects under a main program, is an extensive program covering technological, organizational and operational developments, extending through years. The first tangible outcome of this program was the successful transformation of the Equity Market trading system to the new technology on November 30, 2015.
Within the scope of BISTECH Phase 2, the Derivatives Market successfully went live on the BISTECH system on Monday, March 6, 2017. This was an end-to-end transformation, including the transformation of the environmental systems such as risk management and data storage, in addition to the core trading and clearing systems.
With this transformation, the Derivatives Market gained a secure, high performing, fast and multi-instrumental structure, just as the Equity Market did last year. In regards of the technical capabilities, the Derivatives Market has been transformed into a market in conformity with the international standards, which enables it to become a center of attraction for the foreign and/or multinational corporate investors, who may make investments using their current technologies.
Along with the BISTECH transformation of the Derivatives Market, the Pre-Trade Risk Management system has been introduced for the first time. This application allows user and account authorization checks, position limits on user basis, maximum order size checks, margin checks on account basis, and position limit checks on market and registry basis.
During the transformation process, we paid attention to keep the Derivatives Market’s current operation rules unchanged, therefore facilitating it for the market participants to adapt to the system. Moreover, the BISTECH infrastructure was developed in order to support new products and services such as After-Hours-Trading, custom-made contracts and strategy contracts, which will be put into service in the forthcoming period.
In the new structure, risk and collateral management application was designed in integration with the trading and settlement systems. This integration allows the creation of a risk management system that can operate uniformly and simultaneously for all Borsa İstanbul markets while ensuring the pre-trade and post-trade risk management processes to operate in harmony. As the risk management system is designed with a holistic approach, it is possible to consider the risk-diminishing effects among the markets in the forthcoming period. This infrastructure contributes to harmonization with the EU legislation in addition to Borsa İstanbul’s commitments to G-20 and Financial Stability Board and harmonization with CPSS-IOSCO standards.
Borsa İstanbul Chief Information Officer Ufuk Özdemir said that the first outcome of the BISTECH Technological Transformation Program, initiated with the strategic cooperation agreement signed between Borsa İstanbul and NASDAQ, was attained as Borsa İstanbul Equity Market successfully transformed to the new technology on November 30, 2015 followed by the equally successful transformation in the Derivatives Market on Monday, March 6, 2017. Özdemir added that the Derivatives Market reached the BISTECH standards in terms of capacity and performance value, making it an international market where overseas based institutional investors can invest in using their current technology. Özdemir went on to say, “BISTECH Technological Transformation Program allows the diversification of the products and services in the Turkish capital markets, attracting new investments to Turkey, and marketing of the domestic technologies to abroad and therefore making Istanbul an international financial center”.
Lars Ottersgård, EVP and Head of Market Technology, said, “We are deeply honored to have partnered with Borsa Istanbul over the past three years as they overhaul their market technology and practices, and become more secure, high-performing, and faster than ever before,” said Lars Ottersgård, Executive Vice President and Head of Market Technology, Nasdaq. “Through the BISTECH project, Borsa Istanbul has increased its capacity significantly, improved throughput from 10,000 messages/second to 100,000 messages/second and increased order transmission speed with FIX standard protocols implement from 1 millisecond to 100 microseconds. Their intense drive will support their continued growth, create investment opportunities, spread wealth and fuel job creation as they move their business forward.”
BISTECH Technological Transformation Program will continue with the transformation of the two remaining markets of Borsa İstanbul, namely the Debt Securities Market and the Precious Metals and Diamonds Market in 2018. As all the markets are transformed to a common platform, it will not only be possible to fulfill the technological requirements in a sustainable manner, but the national technology developed thanks to the information and experience attained by Borsa İstanbul Group’s market specialists and engineers will be marketed to the countries in the region and flexible and innovative services will be offered to international markets.
BISTECH Technological Transformation Program will contribute to the diversification of the products and services in the Turkish capital markets, attracting new foreign investments to Turkey, and marketing of the domestic technologies to abroad and therefore making Istanbul an international financial center.
Borsa İstanbul’s Bell rang for BISTECH VIOP Transformation
An opening-bell ceremony was organized on Thursday, March 9, on the occasion of the completion of Phase 2 of the BISTECH Technological Transformation Program. Within this framework, Borsa İstanbul Derivatives Market (VIOP) went live on BISTECH. The ceremony attracted significant attention from participants. Borsa İstanbul CIO Ufuk Özdemir and Nasdaq Senior Vice President of Global Corporate Solutions Paul McKeown delivered speeches at the ceremony.