Hong Kong Exchanges and Clearing Limited (HKEX) today announced the development of the Orion Derivatives Platform (ODP), which offers enhanced trading, clearing and risk management capabilities.
This new platform, which is being developed in-house by HKEX’s technology teams with an expected launch in 2028, will help diversify the Group’s derivatives offerings and enhance its competitiveness in the global derivatives market.
HKEX CEO Bonnie Y Chan said:
“Creating future-ready technology platforms and operations is a key strategic priority for HKEX as we help our markets and participants deliver long-term, sustainable growth and development. We are therefore pleased to announce plans to develop the Orion derivatives platform, which represents our significant investment in the future of our markets. Derivatives is one of the fastest growing sectors of HKEX’s diverse business, achieving record volumes in both 2023 and 2022. Developing an in-house platform that is adaptable, efficient and scalable would give us a unique competitive advantage in the global derivatives space .
The launch of the ODP will enhance HKEX’s ability to support the needs of global investors and consolidate Hong Kong’s leading position as Asia’s risk management center and international financial centre.”
The ODP platform will be based on a modular architecture, which will facilitate the introduction of new products, the improvement of the microstructure and the addition of new capabilities to the market. ODP will offer enhanced trading and settlement capabilities to clients, including near-24-hour trading capability, additional order types, an industry-standard interface, as well as an improved testing and onboarding experience. It will also incorporate capital-efficient risk management tools, such as the Value-at-Risk (VaR) model, to align settlement capitalization methods with international practices.
The VaR spread methodology was successfully applied to the HKEX cash market in 2022, offering a clearer, more efficient way to assess risk exposures compared to the previous methodology. With the development of ODP, HKEX will bring VaR to its derivatives markets, further helping to reduce trading costs while ensuring robust risk management.
HKEX Group Chief Information Officer Richard Leung said:
“HKEX is fully committed to driving innovation in our markets through the development of best-in-class technology platforms and the launch of the ODP project underlines this ongoing strategic commitment. From digitization to the FINI IPO settlement platform, from the OTP-C system for our cash market to the LME Select platform for the London Metal Exchange, we have proven that we have the capabilities and experience to build platforms and solutions that are right for the purpose, meeting the needs of our global customers. We look forward to bringing all stakeholders on this exciting journey to own our digital destiny and position the HKEX and Hong Kong financial markets for the future.”
HKEX will actively cooperate with market participants throughout the development process. The transition of the system will be done in a phased approach to ensure a smooth transition. Development of the ODP is ongoing, with market launch expected in 2028.