It Governance Essay

1922 words - 8 pages

IT governance is an improving course and has become an important issue in the information technology area. IT governance refers to the organizational capacity exercised by the executive management and IT management to control the formulation and implementation of IT strategy. It ensures the sustainability of IT and the fusion of business and IT. Ever since the application of information technology in securities industry, IT governance and its future development have been the fundamental issue of the industry.
Hong Kong has the world’s tenth largest security market and the second largest in Asia after Tokyo. Over the last decade, Hong Kong has achieved significant growth in securities market. As one of the most important international financial centers, Hong Kong realized the challenges caused by the increasing competition in the globalized marketplace dominated by technology. Changes in the structure of securities market are supported to meet the requirements and ensure continuous growth. Currently, the major exchanges in Hong Kong are the Stock Exchange of Hong Kong Ltd., the Hong Kong Futures Exchange Ltd., as well as the Hong Kong Securities Clearing Co. Ltd. They are owned by Hong Kong Exchanges and Clearing Ltd. (HKEx). The unification of several exchanges creates a more powerful corporation. High level of information technology and high efficiency are the characteristics of Hong Kong’s securities market trading system. The trend in Hong Kong trading process is toward automation. Traditionally, securities transactions used to be time consuming, expensive and highly reliant on manual operations. With the help of Internet, the process turns to be more efficient and economical. In 1993, the Automatic Order Matching and Execution System (AMS) was announced by HKEx which used to be SEHK at that time. This automation system increased transparency of the whole market which had significant influence on the growth of transaction volume. Later in 1996, the second generation of the Automatic Order Matching and Execution System was introduced, becoming the foundation of off-floor trading. Four years later, the third generation of AMS was implemented by HKEx. This generation has provided a more efficient and reliable approach to serve the operations of the securities market. Due to the continuously increasing trading and transaction volume, electronic order handling system has been developed. Electronic trading system in financial market supports trading of securities with the help of Internet. It allows member firms to transmit orders directly to the exchanges without intervention by the floor brokers.
IT industry indeed has become a vital resource. However, the effective control and management of IT resources is still a serious problem. Recalling the two consecutive technical failures happened in Tokyo Stock Exchange in 2005 which results in hundreds of millions of dollars loss in economy, Hong Kong should increase the awareness of the importance...

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