Global management consulting company Accenture announced yesterday it will help the Shanghai Stock Exchange (SSE) build a new electronic trading system targeted at the Chinese market and based on the Deutsche Borse's Xetra trading system.

An IT implementation agreement has been signed with the exchange to complete the software development within two years, said Robert Gach, managing partner for Accenture's Financial Services in the Asia-Pacific region.

Gach said the project is expected to need 90 to 150 technicians and engineers to develop the software facilities.

"Due to China's possible regulatory control, the development might take a longer time," he said.

The system will be the third to be used in Asia after those in Hong Kong and Malaysia.

Gach said the system will enhance SSE's ability to offer additional products and services to investors and institutions and will enable it to more efficiently scale its operations to meet growing market demand in China.

"With the system, SSE is able to expand the capital market in China rather than focusing on the cash market only as it is doing at present," Gach said.

SSE has licensed the Deutsche Borse's Xetra trading technology, which Accenture will adapt and implement for the Chinese market.

The system is designed to increase SSE's trading capacity to support the future growth of the Shanghai marketplace, he said.

"To serve the needs of our growing number of members and investors, we require a new trading system built upon proven technology," said SSE Chairman Geng Liang.

"The project is part of SSE's investment in its future and the role the exchange will play in the Asian and international market."

Geng's words were echoed by Gach.

He said that establishing the system will give China's capital market access to the global one.

SSE's new generation trading system will have the potential to significantly benefit Shanghai, the whole of China and Chinese investors, he said.

It will bring to China the scalable infrastructure necessary in order to make the Chinese domestic capital markets globally competitive in the long-term, he added.

"It secures Shanghai's future as a centre of Asian trading," Gach said.

"SSE is committed to fully leveraging its assets to enhance the value it provides to institutions and investors," Geng said.

Stock exchange insiders said the new platform will accelerate the introduction of sophisticated instruments and services that can generate greater returns on investment and more control over financial risks.

"It will issue market information in a timely manner to investors, but the practice calls for a system to guarantee it," Gach said.

Werner Seifert, chief executive officer of Deutsche Borse, said the Chinese partner's decision will reinforce Xetra as the benchmark system for equities trading.

"Deutsche Borse is well positioned to be the technological transfer agent that brings China and Europe even closer together," Seifert said.

Gach said Accenture will strengthen co-operation with the Shenzhen Stock Exchange to expand its services.

"China has a big market in banking, which needs a big technological input within three to five years," he said.

It is expected to invest US$10 billion in the banking industry next year to improve its IT facilities. The sum will reach the combined investment of the three largest banks in the United States.

(China Daily November 12, 2004)