PSE postpones by 1 month test run for offsite trading system

The Philippine Stock Exchange (PSE) has pushed back by about a month its test run for the enhanced offsite trading system for brokers as the telephone companies are still adjusting their hardware on the new system configuration the bourse has set up.

PSE chief technology officer Edilberto Ocampo said it will be the first time the telcos will be adopting the Virtual Private Network (VPN) for local floorless trading, making them doubly careful of the system requirements of the PSE such as security and speed in the transmission process.

Last month, PSE officials said they were ready to pilot test offsite trading with the participation of several brokers which, if successful, could provide the brokers the cost advantage against their leased or dial-up lines. At the same time, the PSE could adopt offset trading as a means to extend broker activity beyond the morning sessions and hopefully attract more trades.

The PSE suspended the extended afternoon trading last Oct.15, eight months after instituting the same, after noting that the volume of turnover has not significantly improved to offset the additional costs running to about P85,000 a month.

The VPN is a secure and real-time system that allows trading participants to connect to the trading system of the exchange at a lower cost even from remote places. Using a third-party Internet type transport, the VPN will extend the PSE’s network to the offices of the trading participants, allowing them to operate from their offices without the need to travel and deploy personnel at the trading floor.

It has been successfully tested internally, or within the PSE’s system and for its initial run, the VPN will be tested by five Metro Manila-based brokers and one each from the satellite cities of Baguio, Cebu and Davao.

The PSE is currently working out arrangements with the three largest telcos for the VPN to link up to the exchange’s trading floor at costs much less than through leased lines or dial-up lines.

Ocampo said provincial-based brokers can save as much as P22,000 a month from, their leased line facility while those using dial-up lines can save P3,000 to P5000 monthly.

He said aside from the telcos, the PSE also needs to adjust. Its own computer trading system, called Maktrade, to adopt to the VPN, particularly in the aspect of forwarding messages online. – Conrado Diaz Jr.