PSE to launch new trading system to attract more foreign investors

MANILA, Philippines - After a nine-month delay, the Philippine Stock Exchange is ready to launch next month a new trading system (NTS) that is expected to attract more overseas investors and boost volumes.

In a statement issued yesterday, the PSE said the NTS, which will replace the current Maktrade system used by the bourse since 1993, will be rolled out on July 26.

The start of the new system was originally set in October 2009 but was postponed as the PSE grappled with a host of technical and regulatory issues.

The NTS will use the NSC Trading System Core Products, the trading software product developed by NYSE Technologies SAS , a wholly-owned subsidiary of NYSE Euronext which, in turn, operates the largest exchanges around the world including the New York Stock Exchange and Euronext.

The NTS application is designed to trade a wide range of cash, debt and derivative instruments not currently possible through the current trading system. It is also expected to exponentially improve the capacity of the PSE to handle any future sharp increase in value turnover.

 “The migration of the PSE to the NTS moving forward is expected to drive more business for the PSE to the benefit of its various stakeholders. We are optimistic that this technology upgrade will pave the way for more investments and improve the speed and efficiency of trading,” said PSE chief operating officer Val Antonio B. Suarez.

Under the agreement entered into in 2008, NYSE Technologies will render maintenance services for the NTS for a period of five years.

To ensure the smooth migration to a more state-of-the-art system, the PSE has amended its trading rules to cover the introduction of the pre-close session in order to determine the day’s closing price for securities, adoption of a reduced tick size and board lot, real-time monitoring of foreign ownership, new order and validity types and standardization of the account code, among others.

Currently, the PSE only trades for two-and-a-half hours in the morning, from 9:30 a.m. to noon, one of the shortest trading sessions in the region.Afternoon trading, from 2 p.m. to 4 p.m., will be introduced to coincide with the new trading system.

The PSE implemented afternoon trading in 2002 but scrapped it after eight months as the extended hours, from 1 p.m. to 2:30 p.m., coincided with the mid-day trading break of exchanges in Malaysia, Singapore, Indonesia, Hong Kong and Thailand.