Australian Stock Exchange Limited (ASX)
Trading on advanced technology
“The integrity of a stock exchange is tied totally to the
reliability of its systems. OpenVMS has provided the
foundation for the reliability and high availabilityof our
systems for the last 14 years.”

Angus Richards, Deputy Managing Director,
Australian Stock Exchange Limited

Business results:

> Integrity — Ensures that no data or transactions are

> Reliability — Delivers high
availability through

> Scalability — Handles
growth in daily trading
volumes from 6,000
to 100,000

“Compaq Reliable Transaction Router (RTR) has been the underpinning of our message
system. Our wholearchitecture was initially designed around a transaction-based
environment. RTR has enabled us to meet thehigh demands of volume and integrity that
our messaging system requires. We’re very happy with it.”

Jeff Olsson, General Manager of Production Services, Australian Stock Exchange Limited

“Working together with Compaq GlobalServices, we
established a team to build
thenew environment, while at
the sametimeensuring that
we minimized risk.”

Jeff Olsson
General Manager of
Production Services
Australian Stock Exchange

What makes it work:

> Compaq AlphaServer ES40, DS20, DS10, 4000 and 4100
systemsrunning the
Compaq OpenVMS
operating system v.7.2-1
and Compaq Reliable
Transaction Router software

> Compaq StorageWorks™ storage area network

> Compaq Custom Systems
and Solutions for pre-
implementation integration,
testing and infrastructure

> Compaq Global Services for
VAX to Alpha™ system
upgrade, architecture
services lab for planning,
implementation, and
support, and hardware and
software maintenance

While a stock exchange might like publicity, the last thing it wants is for its IT system to make headlines.

Angus Richards, Deputy Managing Director of the Australian Stock Exchange Limited (ASX) explains, “A system failure in this business is pretty dramatic. It’s all over the front page of tomorrow’s newspaper if a system — particularly a trading system — fails today. Whether it’s a failure of equipment or software, it’s a loss of integrity.”

To ensure the integrity of its IT systems, the ASX relies on Compaq AlphaServer™ systems running the Compaq OpenVMS™ operating system.

“Technology is the basis of our business,” explains Richards. “Approximately 40 percent of our total annual expenditure is technology-related, so we are heavily dependent on our technology. Compaq Computer Corporation is a major provider of that technology.”

Amalgamation gone right

The Australian Stock Exchange was formed in 1987 when six independent stock exchanges that formerly operated in Australia’s capital cities joined forces. While the exchange is only 14 years old, each of its component companies have histories of share trading dating back at least 100 years.

Today, the ASX operates Australia’s primary national stock exchange for equities, derivatives and fixed interest securities. It also facilitates capital raisings for unlisted companies and provides comprehensive market data and information to a range of users.

Based in Sydney, the ASX lists about 1,350 companies and has experienced significant growth over the last several years — listing 100 new companies in the first half of this financial year alone. In 2000, the exchange turned over 169 billion shares, representing about $360 billion Australian dollars.

“On a global scale, the ASX ranks around tenth in size,” says Richards. “Our major challenge is making sure that, as a relatively small stock exchange, we remain relevant on the international scene, because we’re seeing increasing globalization of markets.” The ASX meets this challenge through an innovative use of technology.

From trading floor to computer screen

At the time the ASX was formed, the exchange took the bold step of removing the trading floor and automating the trading system — creating the SEATS Trading System, one of the first truly automated, priority-based trading systems in the world. Later, the ASX developed the first fully automated clearing system. Both systems have become world-renowned.

When building the trading system in 1987, the ASX chose to base its breakthrough system on the OpenVMS operating system. Jeff Olsson, General Manager of Production Services at ASX, explains why. “OpenVMS was regarded as one of the premier operating systems in terms of reliability and integrity. It was also a critical time for the ASX in terms of pulling six different exchanges into one. Given the technical and cultural complexity, we wanted an operating system that had proven reliability and high integrity. Consequently, we chose OpenVMS.”

In fact, OpenVMS systems run in 80 percent of the world’s stock exchanges today.

According to Richards, integrity for an exchange is everything. “In most countries these days, financial systems align very closely with their exchanges. The integrity of a stock exchange is tied totally to the reliability of its systems. OpenVMS has provided the foundation for the reliability and high availability of our systems for the last 14 years.”

“Compaq Reliable Transaction Router (RTR) has been the underpinning of our message system,” adds Olsson. “Our whole architecture was initially designed around a transaction-based environment. RTR has enabled us to meet the high demands of volume and integrity that our messaging system requires. We’re very happy with it.”

Scaling for growth

Scalability is one of the biggest challenges faced by any financial organization today. It’s also one of the key strengths offered by the OpenVMS operating system. Richards explains, “Our experience is that you have to be prepared to handle at least double your previous peak, with fairly short lead time.”

From 1987 through the early 1990s, trading volumes at the Australian Stock Exchange were about 6,000 trades per day, and the trading systems were developed to accommodate that level. In 2000, trading volumes peaked at 100,000 trades, and the ASX has sized its system for 300,000 trades per day. OpenVMS systems have easily accommodated this exponential growth.

Maximizing technology, minimizing risk

A core strength of the ASX is its ongoing infusion of new technology. “Fundamentally, we’re an electronic business,” says Richards. “I think in terms of technological evolution, because ultimately that’s the way you control your costs.”

The key, according to Olsson, is to manage the risk of moving to new technology and mitigate any impact on the customer. “We developed our automatic trading and clearing systems ahead of most of the exchanges globally, but we’ve been able to introduce those advances with a minimum of risk because our systems are based on proven technology. As a result, we have greatly enhanced the value we offer to our customers.”

To gain higher performance, the exchange recently upgraded from Compaq VAX™ to AlphaServer systems. “The upgrade was a relatively painless process,” says Olsson. “We went about the conversion in a progressive way — converting the trading system, settlement systems, and so on, in different timeframes. Overall it’s been a very successful conversion.

“Working together with Compaq Global Services, we established a team to build the new environment, while at the same time ensuring that we minimized risk,” says Olsson. “We worked very closely in testing the environments with Compaq before going live. We actually ran systems in parallel for a period of time to ensure that the integrity of our applications would be maintained.”

According to Olsson, the implementation of a Compaq StorageWorks™ storage area network and the upgrade of the CHESS (Clearing House Electronics Sub-register System) infrastructure was another successful effort of Compaq Custom Solutions and Compaq Global Services. “At that time, there were very few storage area networks in Australia. In fact, I believe that ours was the first. Suffice to say that the implementation went flawlessly.”

Continuing the spirit of innovation

“We’ve been leaders in technology now for over 14 years,” says Olsson. “During that time, Compaq and the ASX have had a very close relationship that’s enhanced the value of the exchange — both in bringing innovative products to market and in building relationships with our customers.”

Commenting on the future, Richards says, “Our fundamental business remains trading, but we’re extending ourselves along the value chain in securities processing.” The ASX wants to form linkages with foreign markets so that its dealers can see the Australian market as well as other markets with which the exchange develops reciprocal relationships.

The ASX also sees potential benefits by implementing the OpenVMS Galaxy architecture, which enables software partitioning. “Moving ahead, we believe that the use of the AlphaServer GS series and OpenVMS coupled with Galaxy will further benefit both the exchange and our customers,” says Olsson. “Hopefully, that combination of technologies will provide the basis for an even stronger relationship between the ASX and Compaq, and even higher value for our customers.”

Compaq, the Compaq logo, Alpha, AlphaServer, Inspiration Technology, OpenVMS, StorageWorks and VAX are trademarks of Compaq Information Technologies Group, L.P. in the U.S. and other countries. All other product names mentioned herein may be trademarks of their respective companies. Compaq shall not be liable for technical or editorial errors or omissions contained herein. The information in this document is provided “as is” without warranty of any kind and is subject to change without notice. The warranties for Compaq products are set forth in the express limited warranty statements accompanying such products. Nothing herein should be construed as constituting an additional warranty.
©2001 Compaq Computer Corporation