Turkish capital markets witnessed a landmark cooperation in 2014, when Borsa İstanbul signed a strategic partnership agreement with NASDAQ, write Ali Işık, EVP-IT Systems and Infrastructure and M. Ufuk Özdemir, EVP-IT Application Development, Borsa Istanbul.
Putting technology at the heart of Borsa İstanbul
This partnership agreement also included a project - called BISTECH - that provided a broader perspective on global and competitive trading activities, including post-trade processes and services. This knowledge would play a critical role in the transformation of Borsa İstanbul into a competitive player in the international arena, in terms of its global outlook and business style, and also as part of its role in the İstanbul International Finance Center project.
The project identified that one of the main areas of competition was around technology, so knowing how to develop and better use technology became one of the essential conditions of success of the BISTECH project.
A phased approach
The first phase of the project was completed with the transformation of the Equity Market on 30 November 2015, and the second phase was completed on 6 March 2017 with the transformation of the Derivatives Market.
Both markets have been made faster, more reliable and easier to access with new infrastructure. In addition to the main modules, such as trading and clearing, pre-trade risk management, post-trade risk, and collateral management modules have also been introduced. The security system has also been developed and has undoubtedly contributed to the growth of these markets in İstanbul. Features such as market surveillance, index calculation, data dissemination and data warehouses have also brought better transparency. Borsa İstanbul’s operational effectiveness has been directly and positively impacted by being more transparent.
Phase 2+ of the technological transformation programme launched on 2 July 2018, when the Debt Securities Market and Precious Metals and Diamond Markets were included in the BISTECH platform.
Borsa İstanbul can now offer end-to-end integrated services to its investors on four of its markets using its new modular, high-performance, fast, and multi-instrumented technological structure, with low maintenance and operating costs.
Borsa İstanbul has aligned its functions with Turkish capital markets legislation by using its own internal resources; indeed, the BISTECH platform is the only example in which all products are run integrally in one infrastructure among the markets which operates their markets based on Nasdaq technology.
This long-term transition involved organisational, operational and technical transformation, which affected all stakeholders in the Turkish capital markets. Over 100 companies including Borsa İstanbul, İstanbul Clearing, Settlement and Custody Bank, Central Securities Depository of Turkey, Capital Markets Board of Turkey, NASDAQ, market participants, data dissemination vendors and independent software vendors took part in the transformation programme along with more than 650 individuals.
Borsa İstanbul has strengthened its pioneering role in the İstanbul Financial Center Project, with its four markets delivering a high accessibility rate of 99.99%, 16 hours a day. Its transaction speed has reached world-class standards.
The next goal of Borsa İstanbul is to become the leading provider of products and services that other markets - domestic and international - will be interested in.