FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

April 29, 2009 • 7:15 am 0

BM&FBOVESPA S.A. Announces New Chairman Of The Board Of Directors – Arminio Fraga Net Is replacing Gilberto Mifano

Members of the Brazilian Securities, Commodities and Futures Exchange General Meeting  have elected a new Board of Directors, and appointed Arminio Fraga Neto as the new Chairman. Mr. Fraga is replacing Gilberto Mifano, who has served as the Chairman of the Board of Directors since May 2008.

The appointment of Arminio Fraga as Chairman was confirmed during the first meeting of the newly elected Board of Directors, which was held immediately following the General Meeting.

The new Board of Directors is composed of eleven members, elected for a two-year mandate, which can be extended for another two years. In addition to Mr. Fraga, the directors elected are: Candido Bracher, Claudio Luiz da Silva Haddad, Craig Steven Donohue, Fabio de Oliveira Barbosa, José Roberto Mendonça de Barros, Julio de Siqueira Carvalho de Araújo, Luiz Stuhlberger, Marcelo Fernandez Trindade, Renato Diniz Junqueira and René Marc Kern.

Nine new members of the Board of Directors were elected today: Arminio Fraga, Candido Bracher, Claudio Luiz da Silva Haddad, Fabio de Oliveira Barbosa, José Roberto Mendonça de Barros, Luiz Stuhlberger, Marcelo Fernandez Trindade, Renato Diniz Junqueira, and René Marc Kern.

To see the résumés of the members of the Board of Directors go to http://mrm.comunique-se.com.br/arq/86/arq_86_7629.doc

Source: MondoVisione, 29.04.2009

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, News, , , , , , , ,

April 29, 2009 • 6:35 am 0

MetaBit launches Exchange Simulator for upcoming TSE arrowhead – メタビット、東証arrowhead対応の取引所シミュレーターをリリース

Tokyo, 28 April 2009 – MetaBit announces the launch of its Exchange Simulator (EXSiM), which emulates the behaviour of the order and execution interface (API) to TSE’s new arrowhead exchange trading system.

The timing of the product release – eight months prior to the live date of arrowhead, will create a welcome value proposition for sell side brokers and software vendors alike that are developing exchange connectivity against the upcoming arrowhead.  This product launch is the latest addition to MetaBit’s suite of EXSiM – Exchange Simulator software – catering for Japan’s securities exchanges.

EXSiM for arrowhead supports sell side brokers in and outside Japan to prepare their internal software products, including order management systems (OMS), algorithms and exchange connectivity, in preparation for the launch of TSE’s arrowhead exchange system, scheduled to go live in January 2010. “EXSiM for arrowhead is an agnostic software product that emulates the exact behaviour of the new arrowhead trading API.  EXSiM’s strength lies in its independence of underlying operating system and hardware.  The simulator can be installed by a client’s IT development team inside or outside Japan,” explains Daniel Burgin, MetaBit CEO.

“EXSiM is delivered with a console where a user can script specific exchange behaviour, such as rejections and partial fills of orders that might prove difficult to produce during an exchange test.  The timely availability of EXSiM for arrowhead before formal exchange tests are made available, is due to MetaBit being a Pilot User of arrowhead for its own, ultra low latency (below millisecond) FIX exchange connectivity gateway.”

EXSiM for arrowhead is a Java based software.  The product creates benefits to sell side member firms, software vendors and offshore brokers that plan to become remote members of TSE’s arrowhead.  The new simulator product does not replacing formal exchange tests, but aims to reducing time to market for a participants’ development cycles. EXSiM for arrowhead will continue as a standard MetaBit exchange simulator post live date of TSE’s new exchange system.  It will join the suite of other available EXSiM products such as for Osaka Securities Exchange (OSE).

2009年4月28日 メタビットシステムズ株式会社（本社東京）は、東証の新取引システム「arrowhead」に対応した取引所メッセージシミュレーター(EXSiM)をリリースしました。EXSiMはarrowheadへの注文・ 約定のインターフェース（API）のメッセージ制御を正確にエミュレートします。arrowheadの正式稼働予定日の8ヶ月前という今回の製品リリースのタイミングは、現在社内開発をすすめている取引所会員やソフトウェアベンダーにとって、先行して利用し開発の進捗を早めることに寄与する魅力的なバリュー・プロポジションをもたらすものといえます。この製品はメタビットが提供する日本の各取引所に対応したEXSiM-取引所シミュレーターソフトウェア・スイートに新しく追加されたものです。

arrowheadに対応したEXSiMは、国内外の証券会社に対して東京証券取引所により告知されている2010年1月稼働予定の東証の新取引システムであるarrowheadの正式稼働にあわせた自社の注文管理システム（OMS）、アルゴリズム取引システム、取引所接続などのソフトウェア製品に対するより効率的な準備ができるようになります。

メタビットCEOダニエル・ブルギン氏は、「arrowhead向けのEXSiMは、arrowheadの取引APIの動作を正確にエミュレートする他のシステムに依存せず単独で稼働するソフトウェア製品です。EXSiMの優位点の一つは、使用するOSやハードウェアに依存せずに稼働する点です。このシミュレーターは、国内の社内IT開発チームまたは海外でもインストールが可能です。EXSiMは、ユーザが注文の拒否・一部出来など、取引所テストでの再生が難しい取引所システム特有の動作のスクリプトを書くことがコンソール上できるようになっています。今後予定されている正式なテストにむけた、今回のタイムリーなarrowhead向けEXSiMの利用環境は、自社のミリセカンド未満を実現する、ローレイテンシーなFIX取引所接続ゲートウェイ製品の開発のためにarrowheadのパイロットユーザでもあるメタビットの位置付にも関係があります。」と述べています。

arrowhead対応のEXSiMは、Javaベースのソフトウェアです。この製品は、取引所会員、ソフトウェアベンダー、またarrowheadのリモートメンバーになることを検討している海外の会社にとって大きな利点を提供するものとなります。この新しいシミュレーター製品は、正式な取引所テストの代替手段とはなりませんが、arrowheadに向けた参加者の開発サイクルを早め、製品化までの時間（タイムー・トゥー・マーケット）を削減することを目指しています。

arrowhead向けのEXSiMは、東証の新取引システムの稼働後も、メタビットの標準取引所シミュレーターのライナップに追加されます。大阪証券取引所向けなどの他のEXSiM製品とともに製品の一部となります。

Source: MetaBit Systems, 28.04.2009

Filed under: Asia, FIX Connectivity, Japan, News, Trading Technology, , , , , , , , , , , , ,

April 29, 2009 • 5:31 am 1

Data Management: A new Dawn for Data Governance?

The data management world has long been addressing the data governance problem. Yet, firms continue to adopt erroneous approaches or avoid the issue altogether. Carla Mangado explores how the current economic environment will push firms to give data governance the attention it requires

Data governance has typically been passed over by firms who have not realized the long-term business benefits a successful program can lead to. While the discipline continues to evolve, the level of maturity in the industry is just not present.

But this is already changing. As word spreads about how a good data governance program can help with essentials such as reducing risk and enabling compliance, the current economic environment is already pushing firms to focus on introducing new frameworks.

Software vendor DataFlux released a financial services sector research report in March in partnership with research consultancy Business Development Research Consultants (BDRC), which revealed data governance is clearly on the agenda. The results portrayed increasing momentum, with 34% of participants already having completed a data governance project and a total of 29% currently implementing one or considering to do so.

Awareness is growing fast. In July 2008, the IBM Data Governance Council, a group that focuses on data governance challenges and explores best practices in the field, predicted that within three years data governance would become a regulatory requirement, the value of data treated as an asset on the balance sheet and reported by the chief financial officer, who would become responsible for reporting on data quality and risk to the board of directors.

The predictions are now being realized sooner than initially expected. “Eight months on from releasing the research, we have seen these issues accelerating,” says New York-based Steven Adler, chairman, IBM Data Governance Council, adding that he expects 2009 to be a big year for data governance due to the already increasing focus across many industries.

Such an immediate response is not unexpected. At a time when risk and compliance keeps top management awake at night, awareness of the need for good data quality is rising. And data governance is an essential factor to achieve this goal. In fact, Adler says there is a tremendous amount more activity in data governance today, and he thinks the risk environment and the repercussions around the economy are driving this focus.

Orlando-based Gwen Thomas, president at the Data Governance Institute, says everyone is now confident to move forward in this space, ensuring leaders have the information they need to deal with the credit crunch and the future. “One of the most important benefits of data governance is the transparency it offers into the true state of an organization’s data,” says Thomas, adding that this is a must for effective decision-making, to resolve long-standing data issues and pro-actively to set standards and business rules to avoid future problems.

Now that everything revolves around transparency and control, data governance is certainly seen as the way forward. Methodologies must be put in place to achieve this. Data governance can enable firms to deal with a wide range of systems, creating a consistent and single view and facilitating more effective risk management. “For the business to accurately and effectively manage risk, they need to have a better method or some methods in place to effect information control and awareness,” says Toronto-based Mark Cowan, managing director at the data management strategies and Saas integration provider First Spike.

A clear vision of data is essential. Datanomic, the data integration and data quality software provider, recently started a data governance program with a US-based financial institution. The main driver behind the project is Basel II compliance – which is now becoming a data governance project-driver in the US market – and achieving a single view of the data. London-based Steve Tuck, chief strategy officer at Datanomic, says the first steps consisted of identifying the key areas that need attention and their different requirements. Knowing the state of the data is essential, he says, explaining that he often advises clients to start small.

Firms that already have data governance programs in place are now increasingly turning to such frameworks to achieve goals and provide the required alignment with the cross-functional input needed to effectively tackle data issues. “What I see everywhere is awareness that governance is needed so that these assumptions about quality and standardization and definitions can turn from untested assumptions to actionable knowledge,” says Thomas, adding that data governance can bring all the cross-functional groups together so that they can bring all the pieces of the puzzle to the table.

Cost, Organization and the Business Challenge

Still, with the current cost-cutting initiatives, limited budgets and need for immediate business and economic benefits, some firms may not be willing to start data governance projects. But with increasing talk about regulation having a greater say in the emerging governance, risk and compliance space (GRC) those not involved in data governance will soon have to be.

In fact, according to a white paper released by data quality system provider Harte-Hanks Trillium Software called Data Intelligence and Governance, such needs are already at the forefront of the debate, and regulators now require GRC teams to open their risk governance processes to detailed scrutiny.

London-based Colin Rickard, managing director, north and west Europe at DataFlux, says: “Data governance is about proving to the regulator that what you are doing is correct … creating transparency is equally as important as cutting costs.”

Such programs do provide results, and Thomas says that with the highest ROI of many firms’ efforts, data governance projects are the critical path to enable other projects to be successful – making money while reducing complexity.

Firms are already responding. “They want better quality reports and visibility into the underlying data, a demand now usually coming from the director and senior level of organizations – then from the innovation side of these businesses, they all have to see horizontally across the data sets, better, faster, cheaper than before,” says Cowan.

But firms should not be put off by thinking such projects will not give short-term benefits. Berkshire-based Ed Wrazen, vice-president, product management and strategy at Harte-Hanks Trillium Software, says data governance is all about reaching both short-term and long-term goals with an overall strategy in mind.

“The value is where data governance can be applied in the context of short- and medium-term business goals not losing sight of the overall strategy,” he says, adding that it is all about having a long-term vision while generating value for the organization.

And while tackling projects with an overall strategy in mind, firms also have to set achievable expectations. London-based Peter Moss, global head of content, technology and operations, Thomson Reuters, says some organizations are totally committed to data governance but struggle to get results. “They try to define a perfect world. Instead, they should define a vision where they want to get to and take very pragmatic steps to get there,” says Moss.

To be successful, firms need to tackle the organizational issue. Internal data governance councils, which take the lead when it comes to data governance, have been regarded as part of the solution. These have emerged both at a very high executive level, treating the council as a small board of directors at the management level and at lower levels focusing more on the operational aspects of data governance. “I have seen companies around the world create such groups in past years, but the financial crisis is accelerating it and it’s happening today,” says IBM’s Adler.

But such councils can only be successful if the organization has the right alignment within the business to tackle the challenges. “If you haven’t got the right alignment within the business to make sure everybody throughout the organization is engaging appropriately, then the governance board isn’t going to be of much value, but if you have business alignment and don’t have a back-up board that makes the key strategic decisions, the business alignment will not be as effective,” says Moss, adding that it’s all about combining both together. “Data governance is more about understanding how to manage the journey than defining where you want to get to,” he says.

The main challenge remains achieving enterprise-wide recognition that data governance is linked to business initiatives. This is problematic as, done in isolation and away from the operating pieces of the business or technology, Cowan says data governance will not give the benefits expected.

Terminology could represent one of the first issues that need to be overcome. “Data governance doesn’t inspire a lot of excitement or interest from the business side, but it is increasingly being linked to business initiatives,” says Wrazen. “If you can link data governance to a business program or goal and show the value it will generate with tangible evidence through the improved quality of data, that’s where we will see the success in data governance,” he adds.

Firms are no longer seeing data governance as an optional task but a necessary process – not one project in isolation with a specific timeframe but several projects creating an enterprise-wide program with specific long-term and short-term goals. The industry is even beginning to notice the rise of data governance-related job titles. Perhaps this is the ultimate sign that the approach to data governance is changing.

The Governance Forecast

The DataFlux and BDRC primary research survey amongst a senior IT audience reveals some of the UK financial service sector attitudes to data quality, data governance, regulation and compliance.

34% of firms have already implemented a data governance project

11% of firms are implementing a data governance project

18% of firms are considering implementing a data governance project

16% claim no-one has specific responsibility for data quality or governance initiatives

36% claim IT is responsible for data quality or governance initiatives

14% claim the data steward/manager is responsible for data quality or governance initiatives

91% of firms have established an enterprise-wide view of data

9% of firms have no wide view of data but plan to change this

73% say compliance is the main driver for investment in data management

52% say organizational efficiency is the main driver for investment in data management

By: DataFlux, BDRC.

Source: IRD – Inside Reference Data, April 2009

Filed under: Data Management, Library, News, Reference Data, Risk Management, Standards, , , , , ,

April 29, 2009 • 5:30 am 0

Deutsche Börse Group opens new representative office in Tokyo

The leading international exchange organization Deutsche Börse announced the opening of its new representative office in Tokyo. The new office was officially established today in a ceremony with major financial market participants and Japanese authorities.

The new representative office will serve as a local hub for the Group’s business segments Eurex, the leading derivatives exchange, and Deutsche Börse Market Data & Analytics (MD&A), a leading provider of capital market information and indices. It marks an important step to strengthen and expand Eurex’s and MD&A’s relationships to its business partners in Japan. Nagayoshi Miyata, who joined Eurex in 2007, is the chief representative of the Deutsche Börse Group’s office.

Michael Peters, responsible for the Asia business expansion of Deutsche Börse and member of the Eurex Executive Board, said: “The new presence in Japan will significantly improve our local customer service and foster our direct relations with Japanese market participants. It is also a sign of our strong commitment to the most important financial center in Asia, in which close relationships with key institutions have already been established.”

The new office in Japan – as a part of Deutsche Börse Group’s international offices – complements the recently opened representative office of Deutsche

Börse in Beijing, which started its operation in December 2008, and the Eurex office in Hong Kong, which was opened in February 2009. It will also leverage the existing business relations of Deutsche Börse’s subsidiary Clearstream, which has been present in Japan since 2007.

Source: Deutsche Börse, 28.04.2009

Filed under: Exchanges, Japan, Market Data, News, , , ,

April 28, 2009 • 11:56 pm 0

Asian electronic trading revenues to decline – TABB

Electronic trading revenues are anticipated to fall in the Asia-Pacific region, while the development of dark pools is expected to stall, according to new research from consultancy TABB Group.

In ‘Asian Equity Trading 2009’, TABB predicts that income from electronic trading will slip 16.9% to $815 million this year, from $981 million in 2008. This follows a similar decrease of 17.7% in institutional value traded in the previous 12 months, a drop that affected overall trading strategies in Asia, according to TABB.

“In the second half of 2008, there was a significant pullback leading into the first quarter of 2009,” said Matt Simon, TABB Group analyst and author of the report. “Traders saw liquidity sink.”

The study, which examines institutional trading across Japan, Hong Kong, Korea, Australia, Singapore and Taiwan, estimated that dark pool uptake in Asia-Pacific would take longer to develop than in the US and Europe. TABB predicted that by 2010 3.5% of value traded would be matched off-exchange in Japan and 1.5% in the five other market centres examined. Volatile market conditions have also marked a return to VWAP/TWAP algorithmic trading strategies from buy-side traders in the region, the report added.

Despite the decline in electronic trading revenues, global expansion in the region is expected to continue, driving connectivity to new markets such as Malaysia, Thailand and Indonesia.

Source: The New Trader, 23.04.2009

Filed under: Asia, Hong Kong, Indonesia, Japan, Korea, Malaysia, News, Singapore, Thailand, Trading Technology, , , , , , , , , , , ,

April 28, 2009 • 11:04 pm 0

No Swine Flu Emergency Yet, but Banks Should Keep Eyes Open

James Kerr says it’s better for banks to be safe than sorry when it comes to building pandemic-related contingency plans—and Y2K-type backup plans are insufficient.

The swine flu scare hasn’t reached pandemic proportions at this point. However, that hasn’t stopped people and the markets from panicking slightly. Just today, someone working for Ernst & Young in New York was reported to have had swine flu. And stocks are still a little jittery as news of the scope of the disease continues to be broadcast.

“It doesn’t take much to get a reaction out of the market during these uneasy times,” James Kerr, president and managing partner with Cromwell, Conn.-based Best Practices Enterprise Group, told BS&T. “It’s unfortunate that the markets reacted to this because these isolated outbreaks have had little impact on business throughout the world. If it reaches pandemic proportions, yes, some businesses will be in jeopardy. But, as of the moment, calmness should prevail as businesses do what they need to do to prepare for contingency operations.”

Although it’s not yet time to push the panic button, it is still important for banks to monitor something like the spread of swine flu closely and to take stock of their disaster recovery plans. Today’s situation is reminiscent of what happened during the bird flu scare just a few years ago, Kerr comments. “I don’t see any major differences in the way businesses have reacted to this compared to the bird flu scare. Most firms took little action then. I don’t think this scare will make them take any more action now.” This kind of complacency can be dangerous. Kerr senses some banks might think the contingency plans they developed to handled Y2K, for example, are adequate. This is not the case, he asserts, since the steps a bank would take in the event of mass computer outages differ greatly when compared with what must be done if workers are unable to report to the office. “A few years ago many firms built contingency plans to handle a Y2K catastrophe scenario, such as electrical outages, water outages and transportation problems. So, they think that they can just dust those business continuity plans off if a pandemic strikes. But, here again, the Y2K scenario and what you do about it is much different than one where workers can’t work. Certainly, many organizations have done it right and have built pandemic-specific business contingency plans. But, many others have not.”

Based on what he has seen from the research, Kerr is inclined to believe it isn’t a question of “if” but “when” when it comes to a worldwide flu pandemic. “The problem is most of us choose to ignore these kinds of warnings and most of the time we do just fine,” he comments. “But, I advise my clients that it is far wiser to make an investment in planning for this (even if it never happens) because the cost of planning is a lot less than the cost to the business if it gets caught without a plan.”

Source: Bank System & Technology, by Maria Bruno-Britz , 28.04.2009

Filed under: Asia, Banking, Latin America, Mexico, Risk Management, , , , , , , , , ,

April 25, 2009 • 4:31 am 0

Business Entity Identifiers White Paper – The Crucial Foundation for Accurate Risk Management »

Download: Business Entity Identifiers- March 2009 White Paper A-TeamGroup

There is an immediate and pressing requirement from financial institutions for a usable global enumeration standard for business entity identifiers. Getting risk management houses in order is a clear driver, but this also comes against the backdrop of the anticipated onslaught of new regulations that financial institutions will have to contend with, along with the ongoing need to improve operational efficiencies, reduce errors, and reduce costs.

So while industry bodies continue the lengthy process of agreeing on a standard format to bring to market, is there an immediate step that financial institutions can take to fill this void? We believe there is, and it is a step that a number of fund managers and investment banks are already piloting.

Source: A-TEAM Group,  27.02.2009

Filed under: Data Management, Library, News, Reference Data, Risk Management, Services, Standards, , , , , , , , ,

April 25, 2009 • 12:45 am 0

Colombia Stock Exchange seeks regional integration

Colombia’s Bolsa de Valores (BVC) is actively looking to merge with other Latin American Exchanges and has been in talks with the Lima Exchange (BVL) as well as Panama’s (BVP), according to a New York based Equity Analyst covering exchanges. “Colombia is pushing for integration and has already signed several MOUs with Lima”, the analysts says. See also pervious FiNETIK news 04.08.2008.
One problem is that while the Columbian Exchange has talked to Lima, it has not talked to Cavali, Lima’s ClearingHouse. The Lima exchange owns 30% and if an offer for the exchange does not include Cavali another party could set up an other trading system.
Source: LatinFianance, 24.04.2009

Filed under: Central America, Colombia, Exchanges, News, Peru, , , , , , , , , , ,

April 24, 2009 • 3:01 am 0

Asian equity electronic trading revenues to sink in 2009 – Tabb

Equity electronic trading revenues in Asia Pacific are set to see a 17% fall this year, with liquidity sinking during the downturn, according to research from Tabb Group.

Tabb predicts revenues will drop to $815 million, down 16.9% from $981 million in 2008. This follows a 17.7% decrease in institutional value traded from 2007 to 2008, a year-over-year drop that has affected overall trading strategies across Asia.

Tabb says the global downturn hit just as electronic trading was taking hold in the region, forcing many hedge funds to curtail electronic strategies or simply shutter operations.

Matt Simon, Tabb analyst and report author, says: “In the second half of 2008 there was a significant pullback leading into the first quarter of 2009. Traders saw liquidity sink.”

The research also highlights the slow rate of dark pool trading adoption in the region. Dark pools are estimated to account for at least 10% of all equity trading in the US whilst the introduction of MiFID has spurred their growth in Europe.

They are far less popular in Asia although last month Goldman Sachs launched its Sigma-X dark pool equity trading system in Hong Kong, while CLSA, Instinet and Investment Technology Group also run platforms in the region.

Yet Tabb estimates that only 3.5% of value traded will be matched off-exchange in Japan by 2010, up from 1.2% in 2008. In Hong Kong, Korea, Australia, Singapore and Taiwan, there will be just 1.5% traded off-exchange, although this compares to a paltry 0.3% in 2008.

Other trends indentified by the report include continued global expansion, which is driving connectivity to new markets such as Malaysia, Thailand and Indonesia

In addition, buy-side firms have returned to volume-weighted average price (Vwap) and trade weighted average price (Twap) strategies amidst current volatile market conditions. Meanwhile demand for transaction cost analysis is increasing with 35% of buy-side firms using some type of independent TCA.

Source: Finextra, 23.04.2009

Filed under: Asia, Australia, Exchanges, FIX Connectivity, Hong Kong, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand, Trading Technology, , , , , , , , , , , , , , , , ,

April 24, 2009 • 2:56 am 0

SunGard opens Kuala Lumper GL Net hub

SunGard has opened a new hub of its GL Net low-latency market data and order routing network in Kuala Lumpur, Malaysia.

The hub, which is the eighth to be opened in the Asia Pacific region, will provide international investors with access to Bursa Malaysia, the Malaysian equity and derivatives exchange. Local financial institutions will also gain access to SunGard’s GL Net network of brokers, and be able to take advantage of direct market access execution services to more than 110 exchanges and liquidity pools.

Bursa Malaysia operates a fully integrated exchange offering trading, clearing, settlement and depository services. It is one of the largest bourses in Asia, with almost 1,000 listed companies. By opening this new GL Net hub, SunGard will help international investors send electronic orders cost-effectively to Malaysian brokers via GL Net, helping them trade on the Bursa Malaysia and create new investment opportunities.

Vincent Burzynski, chief product officer for SunGard’s global trading business, said: “The launch of this new hub helps us to address an increasing demand from our Asia Pacific customers for greater direct market connectivity in the region. It will also help international investors to access emerging markets in the region through the Bursa Malaysia. It is a further demonstration of our strategy to expand the GL Net network, supporting the growth of electronic trading and helping customers to find new investment opportunities.”

Source: SunGard, 23.04.2009

Filed under: Asia, Exchanges, Islamic Finance, Malaysia, Trading Technology, , , , , , , , ,

April 24, 2009 • 2:08 am 0

Singapore Mercantile Exchange (SMX) Appoints Mr Thomas J. McMahon As CEO – Ex-Director Of NYMEX And Former Head Of HKMEX To Spearhead Singapore’s New Exchange

Singapore Mercantile Exchange (SMX) has announced the appointment of Mr Thomas (Tom) J. McMahon as its Chief Executive Officer.

Mr. Mcmahon brings with him over 25 years of Industry experience in Derivatives and Commodities across Asia and USA. Prior to joining SMX, he was Heading the HongKong Mercantile Exchange (HKMEX) and was former Director of NYMEX Asia. He possesses a deep understanding of the Asian financial and derivative markets having lived and worked in Tokyo, Singapore and Hong Kong for past several years and is well suited to establish SMX into a truly world class pan-asian commodity derivatives exchange from Singapore.

Mr McMahon joins an a formidable SMX leadership team including Mr Ang Swee Tian, Chairman of the SMX Board of Directors and a widely recognized and distinguished veteran of the futures industry, Mr. Jignesh Shah, Vice Chairman of SMX and Chairman and CEO of Financial Technologies India Limited, and Nobel Laureate Mr Myron Scholes, Member of SMX’s Advisory board, Mr. Tan Soo Nan, Member of SMX Board and former CEO of Temasek Capital and Senior Managing Director of DBS Bank.

“I am delighted that Tom will be joining the team” said Mr Ang Swee Tian. “His experience and industry network will serve us well in forging partnerships and drawing membership that will make SMX a leading derivative market platform for price discovery and risk management in the Asian time zone.”

Mr Jignesh Shah said, “I welcome Tom on board of SMX and am confident that under his leadership, SMX will estbalish itself not only as the first Pan-Asia commodities exchange from Singapore but also among the leading exchanges in the world.”

The newly appointed CEO, Mr. McMahon said “I am honoured to be appointed CEO of SMX and am extremely excited to be part of an highly accomplished and competant team that is committed to make SMX the leading global derivatives and commodities exchange from the East.

Financial Technologies Group, the promoter of SMX, brings huge credibility and pedigree to the venture as a recognized global leader in offering its industrial grade, robust and proven Exchange technology IP (Intellectual Property) and markets domain expertise to create the next generation multi-asset financial markets across the world.

Asia which is home to 60% of the world population and a major producer and consumer of most commodities, will play an increasingly important role in influencing and setting the global commodity prices and SMX will play a significant role in the same by providing a transparent and efficient platform for price discovery, risk management, trade execution and clearing.”

Financial Technologies promoted SMX, is the first Pan-Asian international commodity derivatives exchange located in Singapore and will offer a single platform for trading futures and options contracts on commodities such as precious metals, base metals, energy, agricultural products, currencies and commodity indices.

Financial Technologies Group (www.ftindia.com), which operates the largest exchange and ecosystem network with 10 exchanges and 6 ecosystem, connecting some of the fastest growing economies across Africa, Middle East, India and South East Asia. MCX (www.mcxindia.com) which ranks among the top 10 commodity exchanges globally and MCX Stock Exchange (www.mcx-sx.come) DGCX (www.dgcx.ae) in Dubai, BFX (www.bfx.bh) in Bahrain, GBOT (www.gbot.mu) in Maurititus are among the exchanges set-up by the group.

Source: SMX, 23.04.2009

Filed under: Asia, Exchanges, India, Singapore, Trading Technology, , , , , , , , , , , , ,

April 24, 2009 • 1:15 am 1

Is Mexico’s New Banking Bill a sign of worse things to come in International Banking Regulations?

A proposal to regulate fees charged by banks operating in Mexico won’t put a big dent in Bank of Nova Scotia’s (BNS) bottom line, but it could be a sign of worse things to come, as banking rules around the world begin to tighten in the wake of the financial crisis.

Brad Smith, Blackmont Capital analyst said:

As of the year-end 2008, Scotia’s Mexican operations were responsible for 9% of total earnings and while this legislation could impact on Scotia’s total operations to be marginal at this time.

The greater concern, in our view, is that this is merely an initial step in increased international regulation of the financial industry, thereby putting increased strain on future profits.

The new banking bill passed by the Mexican Senate, but still required to pass through the lower house, proposes ceilings on credit card and loan interest rates and also seeks to regulate deposit rates and eliminate certain banking fees.

Mr. Smith continues to rate Scotiabank shares a “hold” and left his C$36 price target unchanged.

Source: SeekingAlpha, 23.04.2009

Filed under: Banking, Latin America, Mexico, News, Risk Management, Services, , , , , , , , , , , ,

April 23, 2009 • 10:01 am 0

New AIM for Tokyo

A new market for professional investors modelled on London’s AIM is set to launch in Tokyo this spring following a rule change last year. In this co-published article, Japanese law firm Nagashima explains how it will work.

In order to strengthen the competitiveness of the Japanese financial and capital markets, the Financial Instruments and Exchange Act (FIEA) was amended in 2008. One of the main points of the amendment to the FIEA was to allow for the creation of a new market for professional investors. The amendment made it possible to establish new, relaxed exchanges, in which participants are limited to professional investors, referred to as “Newly Created Professional Markets”.

The Newly Created Professional Markets target emerging companies that find it difficult to become listed on the existing exchanges because of the substantial preparation period required for the listing, as well as foreign companies that do not wish to be listed on the existing Japanese markets because of the heavy burden of disclosure requirements.

Under the amended regulations, the current strict disclosure requirements will not be imposed on issuers in the Newly Created Professional Markets. However, issuers will be required to provide and disclose some information to the targets of solicitation and the owners of the securities when issuing securities – and for each fiscal year thereafter. How to disclose this information will not be heavily regulated; style, language, and accounting standards will be left to self-regulations by the exchange. In order to ensure the accuracy of such information, criminal penalties, administrative monetary penalties and civil liabilities will be imposed on companies that provide false or misleading information or statements.

In addition, because the above principles apply only to specified professional investors, certain requirements to notify the targets of solicitation will be imposed, and usual and strict disclosure regulations will be imposed regarding the solicitation of general investors with respect to such securities, beyond the world of specified professional investors. Also, restrictions will be imposed on the sale and purchase of such securities and of derivatives based on them, as well as on financial instruments business operators acting as intermediaries on such transactions for general investors.

Tokyo AIM
Following the FIEA amendment in 2008, the Tokyo Stock Exchange (TSE) announced on January 29, 2009 the establishment of a new market that will be called the Tokyo AIM (Tokyo Alternative Invest Market). The new market is modelled after London’s Alternative Investment Market (AIM), and the launch of Tokyo AIM is expected to take place in spring 2009, subject to the granting of a license by the Financial Services Agency of Japan.

Tokyo AIM, like its London counterpart, will offer flexibility in its regulatory approach. Issuers will be permitted to use either Japanese or English for the disclosure of information, and will have the option to use either International Accounting Standards or US GAAP in addition to Japanese GAAP. Due to the principles-based regulatory approach used by Tokyo AIM, the cost of listing should also be lower as issuers will not be required to file Internal Control (J-SOX) Reports or Quarterly Securities Reports. These features are intended to attract newly developing overseas companies, especially those in Asia, to the Japanese market.

Nominated advisors
A nominated advisers system, referred to as “J-Nomad”, will be introduced for Tokyo AIM and will be based on the nominated adviser system (Nomad) which is central to the regulatory structure of London AIM. J-Nomad has been approved and will be monitored by the TSE. Its function is to assess the suitability of a company for the public market and to ensure the company’s ongoing compliance with the Tokyo AIM rules, in particular with regard to disclosure obligations. The key characteristic of the system is that issuers on Tokyo AIM will report or submit documents and will execute certain other procedures through the J-Nomads, which will act in a guardianship-type role. Once a company is on Tokyo AIM, it must retain a J-Nomad at all times.

The J-Nomad must be a corporation, and it must employ at least three qualified persons whom the TSE approves as J-Qualified Executives (J-QE). These are individuals who, in addition to other requirements, have practical experience in the provision of corporate finance advice. The J-QE position is modeled after the Qualified Executives of London AIM, and it is expected that J-QE will play a core role in Tokyo AIM. It is assumed that most of the J-Nomads will be investment banks, just as they are on London AIM.

Tokyo AIM is expected to play an important role in providing opportunities to fund growing Asian companies in Japan, which will strengthen Japan’s competitiveness in the global capital markets.

Source: FinanceAsia.com & by Nagashima Ohno & Tsunematsu, 22.04.2009

Filed under: Asia, Exchanges, Japan, News, , , , , ,

April 23, 2009 • 9:57 am 1

Liquidnet Survey: Global Dark Pool use set to Grow despite Financial Crisis

The growth in the use of dark pools by the buy side is set to grow significantly during 2009 according to a global survey of investors undertaken by Liquidnet, the global institutional marketplace for equities trading.

Despite the recent decrease in exchange trade volumes, the report found that the majority of participants globally are planning to increase their use of dark pools, with 54% of those questioned predicting an increase, and only 7% foreseeing a decline in their dark pool volumes. Nearly three quarters (73%) of European participants questioned plan to increase their use of dark pools this year, compared to 58% in Asia and 52% in North America.

The findings are published in Liquidnet’s annual Buy-Side Voice report, a survey of 590 market participants including Liquidnet’s buy-side trading Members, as well as non-Member industry professionals including other buy-side traders, sell-side traders, analysts and portfolio managers. The report investigates the implications of major changes affecting the marketplace in the wake of the financial crisis, such as the impact of short selling restrictions, and provides insights on products and desk tools such as the use of algorithms and methods of best execution.

The report suggests that MiFID has not been wholly successful in ensuring access to instant liquidity in Europe. Despite the introduction of a number of new platforms in the wake of MiFID, 40% of European respondents said that their access to instant liquidity has actually decreased since the directive came in to force in November 2007.

The survey also investigated attitudes of the buy-side towards the sell-side, contrasting recent joiners to the asset management industry to long-term professionals. A third (33%) of respondents with less than five years of trading experience believes that the sell side can be replaced with technology, while those with considerable trading experience value the broker relationship more highly. 67% of respondents with more than 30 years’ trading experience do not believe they can eliminate contact with the sell side, compared to just 46% of respondents with less than five years’ experience.

John Barker, Managing Director, Liquidnet Europe, said, “This survey backs up our own data, showing that block trading activity looks set to remain robust, despite declining market volumes on exchange in the wake of the financial crisis. Dark pool trading is not a new phenomenon, but as this report shows, it is increasingly finding favour amongst institutional traders keen on reducing trading costs. Buy-side investors, who wish to trade larger order sizes without worrying about moving the market in the process, frequently find that they are able to achieve best execution via undisplayed, or latent, liquidity.

“It is noteworthy that traders in Europe feel that MiFID has had a negative impact on their ability to access to instant liquidity. The survey suggests that the advent of new trading venues such as MTFs means that traders are concerned about their access to trading opportunities in a more fragmented marketplace.”
Other findings from the survey include:

* 43% of respondents use 1-3 algorithm providers, 12% use 4-5 providers, 26% use 6-9 providers, and 19% use 10 or more algorithm providers
* The majority of North American (68%) and European (67%) respondents are familiar and interested in actionable Indications of Interest (IOIs), compared to Asia where the majority of respondents (56%) were unfamiliar with actionable IOIs
* Approximately 35% of respondents state that short selling restrictions have hindered them as a trader, resulting in decreased liquidity and increased spreads.

Source: mondovisione, 22.04.2009

Filed under: Asia, Data Vendor, Exchanges, News, Trading Technology, , , , , , , , , , ,

April 23, 2009 • 9:36 am 3

Baikal Announces key technology Partners

Hong Kong – 22 April, 2009 – Baikal, the London Stock Exchange’s forthcoming pan-European dark pool Multilateral Trading Facility (MTF) and liquidity aggregation service, has partnered with Fidessa, the independent provider of global trading, market data and connectivity solutions, to develop its order management and smart order routing technology.

Among other partners including BNP Paribas Securities Services and QuantFEED, Baikal chose Fidessa because of the robustness and ultra low latency of its technology, its ability to meet challenging time scales and for the size and diversity of its trading community. John Wilson, CEO of Baikal, said: “We are making good progress towards a phased roll-out of Baikal this year. We are delighted to be working with Fidessa to provide best-in-class order management and liquidity aggregation technology for our customers. With this service we are able to offer a MiFID-compliant best execution service that shields customers from the complexity and costs of direct membership of multiple markets and central counterparties.

The combination of these technology and service providers together with the London Stock Exchange Group’s in-house capabilities and order book technology will establish Baikal at the leading edge of exchange technology, electronic trading services and market connectivity giving it an unrivalled opportunity to be the first neutral liquidity aggregation service.” Baikal’s first service will be the smart order routing capability to provide a one stop shop for navigating fragmented liquidity across Europe.

The Baikal non-display order book, which will be launched later in the year, will use the London Stock Exchange Group’s TradElect platform. By launching the smart order routing first, Baikal and its participants will have the time to establish the network of linkages that will enable liquidity aggregation; these technical and commercial linkages will allow the Baikal order book to maximise trading opportunities at launch.

Baikal, a price referencing venue, will use QuantFEED, an end-to-end ultra low latency solution, provided by QuantHouse, to source market data. Baikal will use the SMARTS surveillance system to monitor in real-time activity on the non-display order book, developing the platform used for surveillance of London Stock Exchange markets. BNP Paribas Securities Services has been selected as the settlement agent for this pan-European liquidity aggregation service, providing customers with integrated settlement regardless of which venue executes the trade.

Once the Baikal order book is launched, CC&G, the London Stock Exchange Group’s clearing house, will provide a pan-European clearing service. Subject to receiving the necessary regulatory approvals, Baikal will offer customers a new proposition in European equities trading by combining algorithmic and smart order routing technology with a multilateral non-display liquidity pool.

Baikal will be a pan-European MTF offering a neutral liquidity venue, which will: Create a new non-display European equities liquidity pool offering the most efficient execution for customers seeking lower market impact costs for institutional size orders; Order route to the widest range of displayed and non-displayed European equities liquidity; and Provide a single connection and net settlement.

Source: Fidessa, 22.04.2009

Filed under: Data Vendor, Exchanges, Hong Kong, News, Trading Technology, , , , , , , , , ,

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