TradeTech Asia 2009 Highlights

TradeTech Asia 2009 came to a close in Singapore on November 19. The 2 day cash equities powwow featured many prominent minds of the electronic trading industry. Panels, roundtables and presentations covered a wide range of topics including regulatory challenges, smart order routing (SOR), dark and lit pools, commission sharing agreements (CSA), counterparty risk, country specific overviews, Asia’s hedge fund industry, algorithms and high frequency trading. There was even a buy-side only discussion where the organizers absconded to another room away from the sell-side. FIX was noticeably missing, however. I did see Edward Mangles the regional director of Fix Protocol but he managed to slip away before I could corner him and question him on their absence.

Among the highlights of the event was Chi-X and their recently announced joint Venture with the SGX called Chi-East. Chi-East is entering the dark pool space in Asia along with the likes of BlocSec, Liquidnet, POSIT and SBI Japannext. During the conference they announced that they would use LCH.Clearnet for clearing and that Ned Philips from BlocSec would join them to run the business.

Counter Party risk was also a hotly discussed topic. A tightening selection process and more scrutiny on broker voting was the line held by delegates. Before the Lehman collapse it wasn’t clear who counterparties were making it difficult to keep clients informed about who was on the other side of the trade. The industry is moving to address this especially amongst OTC products. It was also maintained that flow tended to be with fewer venues and sent to the biggest brokers.

High frequency trading was another topic garnering attention. The legislation being tabled in the US, the perception that “flash orders” are toxic and the unfair advantage cutting edge technology has over the market fueled this lively discussion. Adam Sussman from Tabb Group was on hand to lend insights to this segment of trading. Tabb’s research contends that only 4% of volume on US exchanges is represented by HFT.

Commission sharing arrangements drew its fair share of attention in the current climate of lower trading volumes and brokerage. The buy-side are squeezing research and execution fees to minimize the cost of trading to improve performance. Other issues that were tabled were the currency used to pay CSAs, the head aches of managing them and the industry lobby in Japan who doesn’t unbundled commissions. The delegates revealed that Japan’s Financial Services Agency (FSA) is listening but the point of contact keeps changing for one reason or another.

TradeTech’s Asia equity trading conference had its best showing in its history boasting over 400 attendees. The diversity of topics and feedback from a wide spectrum of the industry proved that electronic trading in Asia continues to gather momentum and will draw the best and brightest to the zone.