Successful drive into futures and options trading exploits SunGard solutions

Mr Hui Yew Ping, OCBC Securities’ managing director, says it is ready to take advantage of all these opportunities, thanks to its investment in technology and, especially, its partnership with SunGard.

The rising tide of global investors means there are new pressures on the Indian markets for adopting global best practices in terms of trading systems and platforms. The Indian market is only now catching up in DMA or algorithmic trading capabilities. Speakers at the SunGard Mumbai City Day said the time was right for change; brokerages have to move to the next level of efficiency and transparency if they have to grow and build on the opportunities now at hand.

The mature economies of the United States, the Eurozone and Japan are responsible for scarcely more than 50% of global GDP. It is the emerging economies which will deliver the world from a double-dip recession. There is much investment focus on China but many other nations also offer opportunities. The three panellists each gave a presentation of the opportunities in the respective emerging markets in which they specialised.

With profound changes taking place in Europe’s securities markets, firms are focusing more on middle- and back- offices. Regional and specialist brokers are looking at the middle-office to deliver superior service to their clients, and play a role in unifying back-office systems, bringing together data from disparate silos. Experts discussed how the middle-office can help overcome post-MiFID challenges and streamline post-trade processes at SunGard’s London City Day.

Can you calculate your real-time risk across your organization? Do you have a credit workflow that integrates all asset classes globally? Our panel of experts discussed how they are leveraging aggregated data from disparate activities to better manage risk, credit and collateral, and automating specific functions of the post-trade value chain.

A panel of market data experts at SunGard’s London City Day discussed both the challenges and potential solutions facing the data industry in the developing regulatory and economic environment. While exploring the evolution of market data, topics such as the “data tsunami”, technological advances and shrinking budgets were discussed but the enduring theme was that when assessing value, relationships matter: whatever the pressures, the fabric of each vendor relationship has the ability to contribute significantly to the price-value equation.

Asian markets are evolving quickly as many electronic trading initiatives unfold. Asia is now the new frontier for developments in technology and innovations. With the launches of Chi-East, Arrowhead and SGX Reach, markets in Singapore, Japan and the rest of Asia are anticipating revolutionary changes in high frequency cross-border trading, together with the increasing popularity and prevalence of dark pools and algorithmic trading. Technology will play a vital role in this evolution, but regulation also has an important part to play.

With regulatory scrutiny set to intensify through 2010 whilst volumes and execution speeds continue to increase, financial institutions, clearing houses and exchanges are under pressure to deliver a more timely, transparent and operationally efficient post-trade landscape. However, realizing these imperatives is no easy task, given the inherent difficulties of achieving real-time position monitoring and true end-to-end straight-through processing (STP) for derivatives. SunGard recently concluded Clearing Panel in Singapore where industry experts discussed the ongoing challenges that confront market participants in the post-trade derivatives processing environment.

Baisse des volumes, arrivée des traders hautes fréquence, fragmentation des marchés… comment les brokers se sont-ils adaptés à cette nouvelle donne ?

While volume and execution speeds continue to increase, financial institutions, clearing houses and exchanges are under pressure to deliver a more timely, transparent and operationally efficient post-trade landscape for derivatives. At SunGard’s recent Clearing Panel in London, Challenges in post-trade processes and operations, attendees heard about the difficulties in achieving true end-to-end STP for derivatives.

In Japan, by 2008, the majority of trading was already through electronic channels. There is also a trend, within that flow, for more algorithmic execution and less ‘point-and-click’ DMA.
In Hong Kong around 28% of institutional flow was electronic with two-thirds of it DMA. However, this data is a more than a year and we would expect to find a greater share for algorithmic solutions today. Singapore, Korea and Taiwan show similar figures and trends: around 25% being electronic and a slow trend within that flow for more algorithmic trading at the expense of DMA.

Index Futures and Equity Swaps (also known as CFDs) are products that give similar exposure to ETFs. While ETFs are not yet as widely used as the other two products, around a third of the larger firms are using them today with a significant increase in adoption over the last two years. Equity swaps can be used for purposes of hedging protection, access, “equitisation” and leverage; that most ETFs are useful only for access and “equitisation” may be limiting their adoption. However, in the US, ETFs are traded at fine spreads and can enable a better appreciation of transaction costs which may be attractive to asset managers.

The cost of operating in the post-MiFID marketplace has become prohibitive for all but the largest brokers. There is, however, a new operating model that tackles these cost barriers head-on and makes it possible for regional and specialist brokers with a strong client service proposition to compete fully with larger firms.

SunGard’s approach is to offer our clients and their FIX counterparts Rules Of Engagement that are in line with FIX best practices, whether it is about collecting a plain-vanilla equity order, a derivative order, a client allocation, or broadcasting market data.

Increasing efficiency has been a constant theme in the history of financial markets. The fallout from the subprime crisis has increased the need to keep a tight lid on costs, but not at the expense of business expansion

Competition at the front end has not, so far, been matched in the post-trade arena, and that is hampering many firms’ abilities to actually trade on the venues they may wish to.

Two trends will continue develop in South East Asia in 2010: more cross-asset and more cross-border trading. Watch Hui Yew Ping, managing director of OCBC Securities -one of the largest stock broking firms in Singapore- describe the trends impacting South East Asia, the company’s focus and its experience working with SunGard Global Trading.

Vincent Burzynski, chief product officer for SunGard’s global trading business, recently answered Dealing With Technology’s questions on the future of smart order routers. Read on…

The multi-venue environment, the turbulent market conditions and the competition between sell-side players have contributed to maintain a rather high volume of market data, but also encouraged the need for automated trading systems, which are highly market data consuming. Such trends could explain why low latency and added-value market data flows are strong sell-side requirements.