Twice in as many months, IT problems have stopped trading on the New Zealand Stock Exchange. Has new chief information officer Chris Corke bitten off more than he can chew?

With considerable understatement, Chris Corke remembers 23 September as an “interesting” day. He had just landed the job of chief information officer of the New Zealand Stock Exchange (NZX), one of the country’s key financial institutions. It was a big career step but, armed with his previous experience, including a five-year stint on the London Stock Exchange, he was confident he would make a success of this high profile role.

But on his second day, when he had hardly had time to get to know the names of all his staff, a software glitch forced him to pull the plug on the exchange’s main trading system.

Until he had isolated and rectified the fault, no share dealing could take place in New Zealand.

He managed to bring the system up again by the early afternoon, but this was the third time in five months IT problems had forced the stock market to close. When he had finished reassuring frustrated stockbrokers he began to take the first calls from the press.

System checks that morning had revealed a software fault that would have prevented several broking firms from trading when the market was due to open at 10am. The exchange was expecting a busy day, as a local investment company was due to make a partial bid for one of the NZX’s listed companies, but the software fault meant some key broking players would not be able to participate.

The decision was taken to postpone opening the market while Corke investigated the problem. Eventually, he discovered a query function on traders’ workstations that displayed the status of stocks was causing communications problems. “It was quite a complex issue to identify, but we managed to open the market again by 2.45pm.”

The demands on Corke were all the greater because of earlier market closures caused by unrelated faults.

On 20 August the exchange closed at 11.30am and did not reopen until the following day, after several stockbrokers noticed shareholder balances, as stored on an external share registry, did not reflect their clients’ true positions. In a statement, the NZX explained the inability to confirm in real time that share trades were being properly recorded compromised the integrity of the market, so there was no alternative but to suspend trading until confidence was restored.

According to one report, the NZX also closed for three hours on one day in May due to the failure of a hardware component.

While these earlier closures had occurred before Corke joined, he was now in the hot seat. “There were quite a lot of parties interested in it,” he says.

The NZX has drawn some criticism for being too quick to close the market, especially when technical problems were affecting only a few participants, but he defends this policy. “If you’re not absolutely certain what the problem is, you can’t be sure of what effect it is having on the system, and ultimately the market, so we had no alternative but to close. Rather than being unduly cautious, I think we were acting responsibly.”

No more shouting

New Zealand’s stock exchange evolved from regional trading floors in Auckland, Wellington, Dunedin and Thames. While the NZX is Wellington-based, the 36 broking firms it serves are located across the country.

Corke says this is one of the reasons why the brokers are totally reliant on the NZX’s electronic trading systems.

“There used to be a centralised floor, where all the brokers used to stand so they could actually shout the figures at each other. But once you brought in a computerised system and they all moved to disparate areas in New Zealand, you don’t have that centralised point anymore.”

In an average month, the NZX handles around 45,000 transactions with a total value of $1637 billion. The prices of the 222 quoted securities are set by the amount the brokers – who are working on behalf of institutional and private investors – are prepared to offer or accept for each stock.

Most brokers use PC-based workstations connected to the exchange’s internally developed Faster trading and settlement system, as well as a number of external share registries.

“I guess you could conceivably ring up all the different brokers and ask them what prices they’re putting forward, but there are a very large number of shares being traded and it would be very difficult to work a manual process around it,” says Corke.

Another important class of user is the 14 data vendors, the largest of which are Bloomberg and Reuters [see MIS September 2003, page 34], which are licensed to publish NZX market data in New Zealand and around the world. These companies are usually given open access to the NZX systems and are responsible for writing their own code to extract data as required.

Finally, a third type of user accesses the NZX website (at, which publishes stock prices, company announcements and stock exchange news. Regular visitors include investors seeking information to help them make investing decisions, entrepreneurs checking out the competition and analysts and journalists.

Corke says monthly hit rates suggest tens of thousands of people are visiting the website. These usage statistics are used to identify ‘what’s hot and what’s not’ and useful feedback is also gained from emailed comments and questions.

Program of work

Earlier this year, the NZX took the plunge by turning itself into a listed company with an initial public offering. As part of a process to identify potential risks to investors, the exchange commissioned an audit of the exchange’s hardware and software infrastructure.

The three-month audit, conducted by HP’s consulting arm, made the following observations and recommendations:

Network hardware supporting communication lines to brokerage firms is ageing and its maintenance, along with NZX’s existing recovery systems, is not at recommended levels.

Some of NZX’s relationships with providers and users of its information technology are not supported by formal contracts.

For NZX to remain technologically competitive, continued improvements – and therefore ongoing capital investment into NZX’s systems – is required.

Corke says he will address the main recommendations of the audit, including implementing a major network upgrade, within a year, but other improvements will take longer.

“I’ve got a program of work which will probably take between a year and a year-and-a-half. The audit is not addressing current issues in its entirety, but it’s also recommending future ways forward. For example, increasing the capacity of the system. Those things, which we don’t need to undertake but which we want to, will take a little longer.”

Corke points out the audit did not find fault with the NZX’s primary hardware and software systems.

A large part of the system runs on HP Non Stop (formerly known as Tandem) servers, in constant dual-node operation at the main site in Wellington as well as at a back-up location. Corke is familiar with this hardware, as Tandems were used at the London Stock Exchange when he worked there 10 years ago.

He says some of the technology has moved on a bit since then, but the functions and the instruments available are essentially the same.

“I know we had our unfortunate problems a couple of weeks ago, but it’s actually a very resilient system. From a hardware standpoint you don’t get much better uptime. There are some steps we have to take to enhance future deliveries, and I’m working on that at the moment, but that’s not a reflection on the current stability of the system for the market.”

Corke says he is also happy with the Faster trading and settlement software and there are no plans to replace it. While he is “still coming up to speed” with some of the exchange’s more obscure systems, he has identified a number of improvements he wants to make that were outside the scope of the audit. “Obviously I’ve got my own perspective on the internal processes and I’m doing a review with a number of suppliers at the moment.”

Strategic initiatives

Corke reports to the CEO, Mark Weldon, and is a member of an executive committee that includes the head of strategy, Carl Daucher. While Corke has sign-off authority for most internal IT projects, management drives some initiatives.

“It’s a two-way activity. I am responsible for the infrastructure and software development and all IT-related matters internally, but obviously Mark Weldon has his views on new activities, and some of the things we do are driven from the strategy point of view. Carl Daucher might propose a strategic initiative that he feels is worthwhile and we will scope out the IT component of it but, in terms of improving the service to customers, that would be where I would come back to the fore.”

Corke’s schedule includes weekly meetings with the strategy manager and the chief executive officer as well as the executive committee. “We just sit down and go through what’s underway and what’s required. I also get the whole IT team together once a week and go through what they’re dealing with and I’m also in touch with them on a day-to-day basis, of course.”

Corke’s previous job was a management position within Telecom’s mobile phone division, but he relishes working in the environment of a smaller organisation. “Decisions tend to be made straight away, there’s no hanging around.”

While he is undoubtedly facing considerable challenges, Corke will probably also benefit from the NZX’s ‘new broom’ and apparently IT-minded management. Significantly, Corke rates achieving management buy-in as the second easiest aspect of managing a project.

But the management’s enthusiasm for technology is partly borne out of necessity. The prospectus issued to investors prior to the NZX float went to some length to warn them the exchange needed to keep up to speed with technology to ward off competition from existing and yet-to-be-developed exchanges.

The NZX is the only entity approv-ed and registered by the New Zealand Government to operate a securities exchange, but this could easily change. The prospectus also warned technological advances were creating pressure to develop more efficient and less expensive trading facilities at a time when the globalisation of investing meant investors were looking to diversify their trading through different markets. The same technological advances could mean newly developed exchanges could appear very quickly.

Corke agrees he has taken a big career step, but he certainly does not sound like someone who has bitten off more than he can chew.

“I’ll be getting the chance to shape the IT direction of one of the country’s singular financial institutions. It doesn’t get much better than this, really.”

Rate your challenges

When interviewing IT directors, MIS asks them to rate the most challenging elements of managing a project. Here, NZX’s chief information officer, Chris Corke, rates his general project management challenges.

Most challenging

Managing emergencies

Selecting vendors

Managing vendors

Getting support of other company stakeholders (including the users)

Keeping projects on time and on budget

Finding and motivating the right staff

Getting support of board and CEO

Strategy and planning

Least challenging

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