The Irish Stock Exchange has revamped its website and overall technology strategy to enable the 200 year-old institution to score some global market firsts as well as encourage a new generation of Irish retail investors to take an active interest in stocks and shares.
The Irish Stock Exchange (ISE) was established in 1793 and has a respectable reputation in the fast-moving world of international finance. Although small by international standards, the Dublin-based stock market is home to a diverse range of traditional and not-so-traditional stocks that are household names in this country.
In recent years, the ISE, which spawned many dual initial public offerings (IPOs), witnessed the recent technology downturn in the harshest sense. In the three years since the downturn took hold, some 30 stocks have delisted and no companies have opted to go public on the ISE since 2000. The ISE was also influenced by the global enthusiasm for dotcoms and tech stocks and in September 2000, at the height of the dotcom boom, introduced the ITEQ, Ireland’s own technology index.
At its launch it proposed having some 40 technology companies, but only accrued eight companies in the end with a capitalisation of €800m. Following the management buyouts of Alphyra and Riverdeep, there are only six companies left on the ITEQ, which has a possible €500m capitalisation at most.
However, unknown to most Irish people, the ISE is still a world leader in its own right. The ISE has established a leading position globally in investment funds and specialist security listings on the world stage.
“We are an acknowledged as the world’s number one leader in the listing of investment funds and we are in direct competition with Luxembourg for number one position in the business of specialist security listings,” explained the ISE’s chief technology officer (CTO), Alan Finan.
For an old world stock market, the ISE is also aiming to be a world leader in the deployment of technology to manage the flow of information within the investment community of stock brokers, markets and investors as well as encourage the growth of a new generation of Irish retail investors. Unlike the US, where ordinary people invest in shares daily, Irish people have been conservative in taking a risk on the stock market; something the ISE wants to change by deploying an interactive e-learning section to its website that will educate potential future investors on how the Stock Exchange works.
Finan has been instrumental in redeploying and upgrading the ISE’s technology to bring it up to speed with the latest e-business technologies as well as making the exchange more accessible to the investment community and the general public. In January, the ISE launched its revamped web pages with information fed through XML technology, power by an MS SQL Server database and content managed by local firm Parallel Internet’s pTools software. Finan explained that the deployment of these technologies have resulted in a 75pc reduction in maintenance costs for the site.
Unlike the previous incarnation of the ISE, which resembled a brochure-ware site, the new look website contains regular pricing information, updated every hour. Only investment fund managers, stock exchange members and paid-up subscribers to financial news services like Reuters and Thompson Financial are entitled to real-time feeds from the Stock Exchange. The new site is more graphics-driven in its approach providing a more enhanced user experience and gives users full access to share trading history.
“The last few years have seen fundamental technological changes take place within the ISE,” Finan told siliconrepublic.com. “We have put in a lot of different back office applications that allow for easier transmittal of documents that has sped up the processing of trades for the ISE. Traditionally, documents of five to five hundred pages long would have to be couriered between the exchange and brokers. This would have time implications in terms of fund listings and accuracy. An electronic workflow system has made the process transparent and easier to use. It is more reflective of the needs of the exchange and the needs of the investment community.
“The main technologies that power the Irish Stock Exchange would include a HP-Unix server system, Oracle software and Microsoft SQL Server,” Finan explained.
It will come as a surprise to most Irish people that the trading engine of the Irish Stock Exchange is actually hosted in Frankfurt, Germany, by German financial technology services provider Deutsche Borse. “Our trading system, known as ISE Xetra, sits in Frankfurt on an IBM mainframe. Our trading system is more than the ability to trade but the ability to disseminate information in real-time. For a market the size of ours, having our own bespoke trading system sitting in Dublin wouldn’t have been financially viable. By going down the outsourced route with Deutsche Borse, we have access to a market model similar to the Irish model and at a cost that suits our strategic goals,” Finan said.
Finan told siliconrepublic.com that his department is heavily engaged in evaluating new financial information exchange models such as BRIL (extensible business reporting language) and others like MDDL. “Overall, the broader investment community has to decide upon a standard that fits. With the greater need for transparency, standardisation is key. We will only invest in a standard that is future proof and won’t involve us having to go back to the drawing board years down the line.”
More imminent, however, is the aim to boost the retail investor community in Ireland. “It is the hope of the ISE that Ireland will have a retail investment market similar to that of the US and other European countries. In May we will be introducing an investor education section on our website, which will be an interactive e-learning-type solution aimed at educating Irish people on different aspects of stock trading, lending, choosing a broker, etc. We are not going to try and push people in this direction, but we will help them to make informed decisions,” Finan concluded.
By John Kennedy