ASX picks NASDAQ tech for new risk platform

The Australian Stock Exchange will replace its current post-trade risk management system with the US NASDAQ's Sentinel technology as part of a wide-ranging, $50 million overhaul of its trading platforms.

In February, the ASX detailed its plans to replace everything from its derivatives and equities trading platforms, risk management and market monitoring systems (phase one of the project) to its post-trade cash market clearing and central securities deposit services (phase two).

It selected Swedish firm Cinnober Financial Technology to provide the technology for its new derivatives and equities platforms, and US-based business intelligence and infrastructure firm Tibco to provide new middleware for market monitoring.

At the time it had not yet selected a technology partner for its new risk management system, which includes the central margining engine supporting the ASX's two clearing houses.

The ASX today said it had chosen the NASDAQ's Sentinel Risk Manager technology for the platform.

The Sentinel technology will provide a "single, real-time risk management system" across ASX clearinghouses and all asset classes, and will offer real-time margin calculation and customer risk analytics.

It will be implemented in five stages over the next two years, the ASX said.

The Australian exchange is no stranger to the NASDAQ's technology - it has been using the US exchange's Genium INET-based equities platform, among other things, for some time. That system will be replaced by Cinnober technology as part of the current overhaul project.

The risk management platform forms phase one of the wider systems overhaul. The first stage will eat up $35 million of the $50 million allocated to the project. 

Vendor selection for phase two - which includes new cash market clearing and central securities deposit services - will start next year.

The exchange is expecting a one-off restructing charge of $6.5 million in the second half of the year related to investment in skills for the project.

The ASX is also working on delivering a new a 24-hour customer support hub in its $36 million Australian Liquidity Centre high-speed data centre in Gore Hill, due later this year.

The customer support centre will combine the ASX's operations, market surveillance and technology teams.