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Market Data Challenges Loom for Firms

With decreasing market capitalizations, high volatility and volumes continuing to skyrocket, financial firms are dealing with significant challenges around managing their market data.

In a Webinar sponsored by Interactive Brokers, Larry Tabb, founder and CEO of Tabb Group, was joined by panelists Martin Kullman, senior product manager for market data services at Raymond James, and Claus Thorball head of global market data at Saxo Bank, to discuss the ongoing market data challenges firms are facing.

Tabb pointed out that with decreased IT spending projected for the 2008/2009 year and cost cutting across the board, many firms are taking a serious look at their market data usage and expenditures.

Tabb set forth three distinct levels that firms can look to analyze and ultimately make decisions to more effectively manage market data in this difficult environment.

First off Tabb suggested evaluating the “easy initiatives” such as managing provisioning better and evaluating who within the firm should have data and who doesn’t necessarily need certain data sets. Rationalizing users to ensure the right data is with the right person is also key and eliminates the costs associated with “nice to have data.”

The second level would be the “medium initiatives” where Tabb said evaluating of appropriate data for appropriate functions within the firm. This would also include determining and rationalizing data redundancies.

Tabb said it’s key to ask questions such as, “do you have the appropriate dual providers and do you need both for each product, category and service level?” At this point it would also be good to evaluate what would happen if one provider went down as well as the possibility of switching out more expensive data providers for less expensive ones.

The third level is the hard initiatives that firms must decide on. This would be additional cuts to market data services in more creative ways and would require top level management buy in as most likely users won’t be too happy, said Tabb.

Kullman described how Raymond James instituted a cost-cutting strategy around market data during the past nine months to a year. “We spent a significant amount of time looking at our contracts, evaluating how we wanted to trim some costs out of those contracts, negotiating and renewals,” said Kullman.

“We had to look internally at how exactly we were using the market data and validate how we were using that data,” he added.

While the cost savings didn’t happen overnight, Kullman said the firm has already seen savings of about 10 percent on total market data spend.

Thorball said that his firm has also undergone significant review and cost cutting around market data. “We started with the low hanging fruit and have been working our way down,” he said. “Now we’re at the ‘hard initiatives’ stage and have to asses the value of each data item and decided whether we want it or not.”

He explained that last year Saxo Bank consolidated its market data cost view across the firm at all levels into one budget. “It came out as the third biggest spending area within the company following the HR budget and the IT budget,” said Thorball. “Naturally that drew a lot of attention to market data.”

Thorball said that Saxo Bank has seen between five and 15 percent cost savings over the last year. But the firm is also investing in certain areas around market data, particularly the infrastructure. “When it comes to service, connectivity lines and distribution lines there will be investment—we don’t want to compromise data quality,” he said.

According to Thorball, and a poll of participants during the Webinar, eliminating redundant providers is the area where most cost reductions are made.

“At Saxo Bank we’re providing multiple markets and using multiple markets internally and had up to three market data providers in each market,” he explained. “We have challenged that and segmented the markets into three tiers. So the top tier, or most traded markets, get full coverage and three providers. The middle tier gets two providers and the least traded markets get one provider.”

The result? “It was a difficult change from the business side but successful from a cost and redundancy perspective. And they haven’t missed the providers,” said Thorball.

Source:Advanced Trading, 03.06.2009, by Cristina McEachern

Filed under: Data Management, Data Vendor, Market Data, News, Reference Data, Risk Management, , , , , , , , , , , ,

Corporate Actions Report April 2009 – Inside Reference Data

Download: Corporated Actions April 2009 – Inside Reference Data

This is at least what industry groups hope will happen. In fact, there is already a
working group creating an XBRL taxonomy for corporate actions, and Swift and the
Depository Trust & Clearing Corporation are both working with XBRL on the corporate
actions initiative. So even though change is not expected overnight, the development is
now a lot more encouraging than it was a year back.

Corporate actions and the issuer debate is now, in fact, becoming an important area
to follow. And with this special report, which includes comments from industry experts
and a news review, we hope to give readers the opportunity to keep on top of the latest
developments in the corporate actions space.

Source: Inside Reference Data, April 2009

Filed under: Corporate Action, Data Management, Data Vendor, Exchanges, Library, News, Reference Data, Risk Management, Standards, , , , , , , , , , ,

Inside Market Data: Low Latency Report April 2009

Download:  IMD – Low Latency Report April 2009

This LATENCY special report looks at how low latency has created huge volumes of data and increase in bandwidth requirements for the industry is now at almost unmanagable levels. However new technologies are developed to speed up price discovery and increase throughput are also enabling firms to increase the speed of other components of the trade lifecycle, such as performing real-time risk management.

If there is any consensus to be drawn from this report is that low latency is “not a key concern” for traditional investment managers, but is “already on the radar of mainstream buy-side firms”, and is “already a factor for some.

More free reports: http://www.insidemarketdata.com/reports

Published by Inside Market Data this special report is sponsored by BT, Citihub; London Stock Exchange; Spryware; Thomson Reuters.

Source: Inside Market Data, 20.04. 2009

Filed under: Data Management, Data Vendor, Library, Market Data, Trading Technology, , , , , , , , ,

Counter Party Risk Report April 2009 – Inside Reference Data

Download: Counter Party Risk- Report April 2009 – Inside Reference Data

The recent market turmoil has highlighted the need for improved counterparty data management, making counterparty risk a number one priority for firms. Inside Reference Data gathered leading industry professionals to discuss the importance of effective data management to mitigate counterparty risk in a web forum on March 30

Source: Inside Reference Data, April 2009

Filed under: Banking, Data Vendor, Exchanges, Library, Market Data, News, Reference Data, Risk Management, Standards, , , , , , , , , ,

FIX Protocal and FISD (Financial Information Service Division) sign statement of understanding

April 16th, 2009 – FIX Protocol Limited (FPL) and the Software & Information Industry Associationâ•˙s (SIIA) Financial Information Services Division (FISD) have signed a Statement of Understanding.  FPL is a non-profit organisation that owns the intellectual property rights of the Financial Information eXchange Protocol (FIX), which is a globally-recognised messaging standard enabling the electronic communication of pre-trade and trade messages between financial institutions, primarily investment managers, broker-dealers, ECNs and exchanges.  FISD is a non-profit, member, roundtable organisation, representing firms within multiple constituencies in the securities industry focused on operational and policy issues related to financial information.

This agreement outlines a collaborative approach that will seek to further promote the use of standards to enhance straight-through-processing (STP), operational transparency, interoperability between market participants and regulators, and improved integration. These efforts will be of significant benefit to the financial services community, enabling even greater efficiencies and cost savings to be achieved.

This partnership will facilitate greater collaboration on a number of initiatives, including an agreement to work together with other industry bodies to provide leadership in the identification of reference and market data industry best practices for inclusion into international standards.  In addition to this, FPL will actively contribute to the FISD Data Model Working Group which has been formed to consolidate and extend existing instrument data models into a framework that addresses the business issues exposed by the current credit crisis.  These issues include the intermittent and inconsistent reconciliation of business and technical practices across merged and acquired platforms, and the relationship between streaming trade data and reference/proprietary information stored in multiple relational databases.

Commenting on this development Jim Northey, Co-Chair FPL Americas Regional Committee, and FPLâ•˙s Industry Standards Liaison stated˛We have had a strong relationship with the SIIA / FISD over the past few years.  This agreement provides a formal grounding for even greater collaboration moving forwards, the result of which will be of significant benefit to all industry participants in the area of reference data standards and transparency.

Bill Nichols, FISD Program Director for Securities Automation Processing, added˛As the distinctions between market and reference data become increasingly arbitrary, FISD and FPL are uniquely positioned to provide our members with a venue within which to cover all aspects of the landscape, from legal issues to down and dirty technical details.  We are pleased to formalise our combined efforts and look forward to increased collaboration in several areas.╡

About FIX Protocol Ltd
FIX Protocol Ltd is a non-profit organisation that owns the intellectual property rights of the Financial Information eXchange Protocol (FIX), which is available free of charge from the FPL website, subject to FPL˙s copyright and acceptable use policy.  FIX is a globally-recognised messaging standard enabling the electronic communication of pre-trade, trade, and post-trade messages up to settlement, between financial institutions, primarily investment managers, broker-dealers, ECNs and exchanges.  For more information, see http://www.fixprotocol.org.

About FISD
The Financial Information Services Division (FISD) of the Software and Information Industry Association providers a neutral business forum for exchanges, market data vendors, specialist data providers, brokerage firms, investment managers and banks to address and resolve business and technical issues related to the distribution, management, administration and use of market data.  Participants use the forum to exchange ideas, build business relationships and improve the business climate associated with the worldwide flow of financial information.  For more information, visit http://www.fisd.net

Source: FPL 16.04.09

Filed under: Corporate Action, Data Management, Data Vendor, Exchanges, FIX Connectivity, Market Data, News, Reference Data, Standards, Trading Technology, , , , , , , , , , ,

Fidessa Expands in Asia Pacific / Fidessa 擴展亞太區市場

Fidessa group plc , provider of the award winning trading, portfolio management, compliance and global connectivity solutions for financial markets participants, has today announced the expansion of its Asian operations to cope with growing client demand across the region.  This expansion includes the appointment of new staff as well as the opening of a larger Asian headquarters in Hong Kong.

Fidessa’s growth in Asia has been fuelled by the rapid take up and interest in new products and services which have been made available to both the buy-side and sell-side communities across the region.

Fidessa’s hosted Asian trading, market data and connectivity platform for brokers, which was launched just over a year ago, has quickly gained a strong foothold in the marketplace.  With 10 clients signed up and a strong local pipeline, Fidessa’s credentials as a global supplier to blue-chip clients of powerful, reliable international trading solutions, have proved a real winner against the incumbent competition.

Another impetus to growth has been the regional debut mid last year of the Fidessa LatentZero portfolio management, compliance and order/execution management product suite for the buy-side.  This full asset-class solution is used by nine of the top ten asset management firms in Europe and the USA, and is already live at its first major client in the region.

“As our client base expands across the Asian region, it is important that we have the staff and infrastructure required to support these customers.  The expansion of our operations in Asia demonstrates Fidessa’s commitment to the region and is a measure of the huge opportunity that we see here.” comments Nevin Price, Fidessa’s regional manager for Asia.

“The staff numbers in Hong Kong have increased by over twofold in the last couple of years to 100 people, and the new office here, combined with the business continuity centre we opened last year, will allow us to scale our operations further as our business grows.  It will also ensure we are able to continue to offer the first class service for which we are renowned going forward” adds Price.

New staff appointments in Hong Kong will grow the client support and sales teams across the product suites, and for the Fidessa global connectivity network for which Hong Kong serves as a regional hub. New staff in Singapore will also add important local support capabilities for the growing customer base that operates from there.

“Our solutions in Asia allow clients to automate their business flows, improve their efficiency and to compete on the international stage.  The demand from both the buy-side and sell-side segments in the region for these solutions is growing, and these investments in our business will ensure we remain at the front of the pack of potential suppliers to this audience” concludes Price.

Fidessa’s products serve around 22,000 users across over 630 clients around the world and are used by over 85% of tier one financial institutions. Fidessa’s network provides connectivity to over 2,200 buy-sides and 360 brokers across 115 markets globally.

香港-爲全球金融市場參與者提供屢獲殊榮的交易系統、投資組合管理,法規遵從及環球連接解决方案的Fidessa group plc(倫敦證券交易所上市代號:FDSA)今日宣佈擴展亞洲區營運業務,其中包括增聘員工及在香港遷至更大辦公室作為亞洲區總部,以配合區內客戶日益增長的需求。

Fidessa在亞洲市場的業務增長迅速,主要原因是其多種新穎產品和服務令區內買賣雙方社群感興趣及採用。
Fidessa 自一年多前起為證券經紀提供寄存的亞洲交易、市場數據和連接平台等服務,並迅速在市場上建立穩固基礎。Fidessa被譽為一間專門為藍籌客戶提供功能強勁且可靠的國際交易解決方案供應商,加上在本地擁有強大的銷售渠道,目前已有十名亞洲交易平台客戶簽約採用其服務。在當前市場競爭激烈的環境下,Fidessa 脫穎而出成為市場的赢家之一。
另一刺激業務增長的原因是 Fidessa 於去年中在區內為買家推出 Fidessa LatentZero 投資組合管理、法規遵從及買賣盤/執行管理產品組合。歐美十大資產管理公司中,有九間正採用其全面的資產級解決方案,而首名亞洲主要客戶亦經已使用。
Fidessa 亞洲區域經理 Nevin Price 表示:「鑒於我們的客戶基礎已擴展至亞洲區各市場,因此我們必須在區內擁有足夠的員工和基礎設施,為客戶提供支援。是次擴展亞洲區業務正反映出 Fidessa 對亞太區的承諾,亦是我們在看到龐大發展機會所採取的重要一步。

Price 補充說:在過去數年,香港僱員人數增加超過兩倍至一百人,而新的辦事處,及去年開幕的業務持續中心,使我們有能力因應業務增長而調整我們的營運和服務範圍;同時也確保我們昭著的優秀服務質素。
在香港新增聘的員工將加入客戶支援和銷售隊伍,專責支援和銷售 Fidessa 各種產品及把香港發展為亞洲區樞紐的環球連接網絡。而新加坡增聘的員工將加強當地的支援能力,以配合當地客戶基礎日益增長所需。

Price 總結說:「我們在亞洲推出的解決方案可把客戶的業務流程自動化;改善其效率及提昇在國際舞台上的競爭力。區內的買家和賣家對這些解決方案的需求正不斷增加,而我們在業務上作出的這些投資將確保我們在芸芸的供應商之中保持領先地位。

Fidessa 的產品服務全球超過 630 個機構客戶合共約 22, 000 名用戶,並獲全球超過85%一級產權經紀所採用。Fidessa 的網絡在全球 115 個市場為超過 2,200 名買家和360 間證券經紀提供系統連接。

Source: Fidessa, 24.02.2009

Filed under: Asia, Data Management, Market Data, News, Trading Technology, , , , , , , , , , ,

SZSE Shenzhen Stock Exchange rolls out XBRL information service

The Shenzhen Stock Exchange (SZSE) has rolled out an XBRL information service platform for listed companies. The platform, optimized and upgraded on the basis of the XBRL trial application website, was launched when listed companies started to unveil their annual reports for 2008.

The platform (http://www.szse.cn or http://xbrl.cninfo.com.cn/XBRL/index.jsp), serves small and medium investors, was based on XBRL standardized data and was incorporated with functions such as display, analysis and download of listed companies’ information.

The launch of the platform indicates the SZSE is heading towards a multi-layered and diversified approach for its XBRL standardized information service for listed companies.

It is noted the XBRL (eXtensible Business Reporting Language), a global standardized technology for financial information, was widely recognized and promoted across the world because it’s readable and comparable in computers and easy for data flow and data treatment.

Currently, the platform provides the query and display of XBRL document data of the reports of all 740 companies listed in Shenzhen from 2004 to 2008.

Principals from the SZSE introduced that investors can find financial indicators in an easy and quick way through the platform’s functions like information query, analysis and comparison, graph display and file download. Comparison and display of historical financial indicators of the same company or a certain financial indicator in a number of companies are also available.

Meanwhile, the application of XBRL in securities industry has a far-reaching impact in securities information disclosure. It can achieve the information share and operation of listed companies in the industry and the securities industry, pushing the standardized advancement of listed companies’ information disclosure and the securities information service industry.

By closely tracking the change of business rules and timely amending the XBRL information disclosure standard for listed companies, the completeness and consistency of information disclosure documents made by listed companies can be testified.

Source: SZSE, 18.02.2009

Filed under: China, Data Management, Exchanges, News, Standards, , , , , , , , ,

FPL Announces the Release of the FAST Protocol Version 1.2

FIX Protocol Ltd (FPL) is proud to announce the release of the FIX Adapted for STreaming (FAST) Protocol(sm) Version 1.2.  FAST 1.2 offers incremental improvements to previous releases, enabling the industry to benefit from even greater efficiency gains.

Working with existing adopters of the FAST Protocol, the FPL Market Data Optimisation Working Group (the team responsible for developing the FAST Protocol), has sought opportunities for improvement and has included enhancements in this latest release that enable greater compatibility for the use of FIX with FAST, specifically with regards to enumerations, time stamps and boolean data types.

Based on the feedback received from the user community, the enhancements included within FAST 1.2 have also been developed in a manner to enable full compatibility with version 1.1.  FAST 1.2 is now publicly available and downloadable from the FPL website, at http://www.fixprotocol.org/fastspec.

The FAST Protocol(sm) is a data compression methodology that has been developed in response to ever-increasing electronic trading volumes and market data messaging rates.  The FIX Protocol(sm)  has achieved very wide adoption, and it was clear that it would benefit from additional facilities to deal with high-volume messaging situations that would normally require greater network capacity.  Other alternatives that had been developed to address this issue presented performance limitations with respect to compression and latency.

By leveraging concepts including implicit tagging, field encoding and binary representation of data, the FAST Protocol(sm) offers a solution that optimises communication in the electronic exchange of financial data and in particular when used in combination with the FIX Protocol.  FAST provides greatest benefits when handling large quantities of data that share similarities in content and structure, and it is now actively used by a growing number of execution venues globally.

Commenting on the launch of FAST 1.2 Greg Maynard, System & Product Strategy Officer at the International Securities Exchange (ISE) and contributor to the FPL Market Data Optimisation Working Group, stated. The development of the FAST 1.1 standard presented a fantastic opportunity for the industry to benefit from reduced message size, reduced bandwidth requirements and improved latency.  FAST 1.2 offers enhanced computing performance and I believe this will drive even greater adoption of the standard.

Rolf Andersson, Co-Chair FPL Market Data Optimisation Working Group, CEO of Pantor Engineering added. The incremental improvements that we have included to create FAST 1.2 present an excellent example of the value that FPL brings to the future development of the electronic trading industry.  FAST 1.2 was created through close collaboration between industry experts to improve the functionality available and to advance the global trading process for all market participants.

Source: FPL, 18.02.2009

Filed under: FIX Connectivity, News, Standards, Trading Technology, , , , , , , ,

Korea Exchange To Launch Next-Generation Trading System Offering A World Class, Efficient Platform For Integrated IT Solutions

The new system is more advanced and faster, and will accommodate a wider range of financial products expected to come after the introduction of the Capital Market Consolidation Act.

The Korea Exchange (KRX), considered the world’s second largest derivatives exchange, has completed an upgrade of its trading system that creates an advanced platform for the benefit of investors in the local market.

The new system is expected to go live on March 23, but is already available for testing by KRX members.

The upgrade, which involves aligning the trading, settlement and information distribution systems, establishes a more efficient platform for obtaining product information, according to KRX.

The next-generation system includes: the KIND (KRX E-Disclosure) and data warehouse systems, which have both been operating since August 2008; a market surveillance system operating since October 2008; and the trading and settlement systems, which will commence operation in March.

Kim Jeong-woo, CIO of KRX, says the next-generation system maximises efficiency, flexibility and stability of trading.

“With its integrated functionality we are confident the system will prove to be the best, and most modern, of its kind,” Kim says. “Within the new system, all functions including order submissions, trading execution, price information delivery and client account management have been integrated and standardised as a single process.”

KRX’s capacity following the introduction of the new system will increase to 40 million quotes per day, twice the current volume. Trade executions or latency time, once the system comes into effect, will decrease to less than 0.08 seconds or 80 milliseconds per transaction, making the system one of the fastest in the world.

Singapore’s is still much faster, though, and remains a leader in Asia as the Singapore Exchange is able to provide access to its trading engines in one to 20 milliseconds.

The existing Main Frame environment has been converted to an Open Unix environment to maximize operating efficiency. In case of failure, the dual system allows for back-up equipment to automatically convert/restore the system on a real-time basis.

To cope with disasters such as fire, flooding, and earthquake, Disaster Recovery (DR) systems have been constructed in Seoul (for systems related to derivatives) and in Busan (for systems related to equities), so if one computer center collapses, the other area’s DR takes over.

The new trading system is also timely because it will allow the KRX to accommodate a wider range of financial products that are expected to follow with the implementation of Korea’s new Capital Market Consolidation Act, which became effective yesterday. The Act lifts restrictions that have so far limited Korean financial institutions to a strictly defined range of services. Previously, Korean companies were not allowed to provide multiple products, spanning equities and derivatives trading, asset management and investment banking.

Member companies will be able to test the new system any time from now until March 23.

Source: KRX and AsianInvestor

Filed under: Data Management, Exchanges, Korea, Market Data, News, Trading Technology, , , , , , , , , , , , , ,

CQG Teams with Tullett Prebon Information to Provide Latin American Fixed Income, Foreign Exchange, Money Markets, and Derivatives Market Coverage

CQG, the leading analytics and order routing platform for global electronically-traded futures markets, has announced that it is adding the distribution of data for Latin American products (LatAmMarker) offered by Tullett Prebon Information, Ltd, the leading global provider of financial market data.

CQG is adding LatAmMarker to its existing coverage of debt markets, foreign exchange, money markets, and derivatives from Tullett Prebon Information. LatAmMarker includes accurate and timely prices for the region’s government debt, foreign exchange, derivatives, and local benchmarks. It also includes information from global fixed income, commodities, and money markets that correlate with the Latin American markets.

Customers utilizing CQG market data will be able to access Tullett Prebon Information’s Brazil Key Market Rates, Zero Coupon Notes, NTN-Fs, and Globals; Colombia Key Market Rates, UVRs Inflation Linked Bonds, TES, and Globals; and Mexico Key Market Rates, Cetes, UDI, M Bonds, Globals, and Swaps Composite Page in the Latin American Marker.

Mike Kirby, Head of the Americas at Tullett Prebon Information, said, “We are delighted that CQG has chosen to extend its range of data from Tullett Prebon Information to include Latin American products. We have a long-standing and successful relationship with CQG and will continue to enhance our high quality and independent financial data offering to CQG’s customer base and other clients globally.” “We are really pleased to add the Tullett Prebon Latin American coverage,” said Rod Giffen, Global Head of Sales and Support. “It’s a great complement to our multi-asset class market data offering.”

Source: Tullett Prebon 08.01.2009

Filed under: Argentina, BM&FBOVESPA, BMV - Mexico, Brazil, Chile, Colombia, Data Management, Data Vendor, FIX Connectivity, Islamic Finance, Market Data, Mexico, News, Reference Data, Trading Technology, , , , , , , , , , , , , , , , , , , , , ,

BMV – Bolsa Mexicana de Valores – New Market Data Feed “BMV in-Depth”

The Mexican Stock Exchange has designed and made available to all Mexican securities market participants a new information and analysis product called BMV a Profundidad (BMV In-Depth).

BMV a Profundidad allows users in general, issuers, stock market brokers and investors to display and watch on their monitors daily and in real time during the trading session, the 5 best stock purchase-sale positions and the most marketable Tracs (stock-referenced certificates) traded on the Mexican stock market.

With the addition of BMV a Profundidad, the Mexican Stock Exchange offers a  service provided by the developed markets and by the vast majority of the stock exchanges in the emerging markets.

Thus, deploying BMV a Profundidad will enable our Institution to compete efficiently and actively with international markets, mainly with those markets where the routing of orders is most active and where this option is in place.

The implementation of BMV a Profundidad leads to the generation of substantial benefits for the securities market as a whole and for all its participants:

•    It promotes a larger attraction of orders.
•    It favors more interest in the market.
•    Generation of liquidity.
•    Alignment with international standards for information disclosure, which will allow the BMV to compete efficiently with other markets.
•    It will promote transparence. It will guarantee equality and security in the securities market, strengthening its image and building confidence among participants.

Source: BMV 31.10.2008

Filed under: BMV - Mexico, Data Vendor, Market Data, Mexico, News, Reference Data, , , , , , , , , , ,

Brazil:BM&FBOVESPA 3Q 2008 Earnings Results

BM&FBOVESPA S.A. reports its earnings for the ninemonth period ended September 30, 2008. Adjusted net income reached R$764.9 million, a 44.8% rise over the nine months to September 2007, with an EPS of R$ 0.375. bmf-bovespa-press-release-3q08_english-version

Source:BM&FBOVESPA 12.11.2008

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

HKEx And Shanghai Stock Exchange Subsidiaries Sign Market Data Collaboration Agreement

HKEx Information Services Limited (HKEx-IS) and SSE Infonet Limited, the information business subsidiaries of HKEx and Shanghai Stock Exchange (SSE), today (Monday) signed an agreement for a market data collaboration programme.

The agreement was signed by SSE Infonet Chief Executive Officer Wang Yong and HKEx-IS Director Bryan Chan in the presence of SSE General Manager Zhang Yujun, HKEx Chairman Ronald Arculli and Chief Executive Paul Chow. Other senior officials from both parties also attended the signing ceremony.

The objective of the collaboration programme is to assist investors who have interest in shares of issuers that have listed in both Hong Kong and Shanghai by raising the transparency of the securities trading in the two markets.

Under the programme, both parties are entitled to redistribute the other party’s basic real-time market data for the companies with listings in the two markets to their own authorised information vendors (IVs) for onward transmission to the IVs’ subscribers for internal display purposes.

The collaboration programme will come into effect on 1 January 2009 and will be subject to a review in two years. The usual exchange fees for market data are waived for the two parties, their IVs and their IVs’ market data subscribers under the collaboration programme.

The programme is expected to benefit investors in both markets and help increase the transparency of the securities trading in the two markets. At the end of September this year, there were 48 companies listed in both Hong Kong and Shanghai, and the group’s Hong Kong-listed shares collectively represented 29 per cent of the Stock Exchange’s turnover and 23 per cent of its market capitalisation.

“The agreement will increase the transparency of the Mainland and Hong Kong markets further, enhance the market data service quality of the two exchanges, provide more complete market information and better service to investors and also further promote the cooperation between the two exchanges,” said SSE General Manager Zhang Yujun.

“The market data collaboration agreement that we entered into today with SSE marks another step towards the closer integration and cooperation of the Mainland and Hong Kong markets. We believe the collaboration programme will benefit investors of the two markets and will be welcomed by them,” said HKEx Chief Executive Paul Chow.

Programme information is posted in the Investor section of the HKEx website under Real-time Data.

Source: HKEx 20.10.2008

Filed under: Asia, China, Data Management, Data Vendor, Exchanges, Hong Kong, Market Data, News, , , , , , , , , , , ,

CME upgrades market data application

CME Group, the world’s largest and most diverse derivatives exchange, today announced the launch of the latest version of CME E-quotes, a premiere real-time streaming market data application offering quotes, charting, advanced analytics and news on CME Group traded products.

E-quotes will enable users to access prices for all CME Group listings, including interest rates, equity indexes, foreign currencies, commodities, energy, metals and alternative investments. In addition, there is also access to prices for products listed on the Minneapolis Grain Exchange and the Kansas Board of Trade, which are available for electronic trading on CME Globex(R).

“CME Group partnered with Chicago-based Computer Voice Systems Inc. to transform their data system into a platform that will provide market participants a sophisticated and intuitive tool to reliably engage the latest news, analytics and quotes,” said Brian McElligott, CME Group Director of Information Products Management. “This is another example of our continued focus on providing our customers with the latest market data technology at a significant value to view and analyze our markets and to better reach more informed decisions.”

The E-quote Basic, Advanced and Professional editions enable users to track the markets with customizable features including quote monitors, market depth, advanced charts, time and sales and more. E-quotes supports Simplified Chinese, Russian and Japanese languages and is expandable to add additional languages.

Features of E-quotes include:

  • Free bundled delayed quote/chart access to all CME Group exchanges
  • Bundled Dow Jones News Select news in E-quotes Advanced and Professional editions
  • Cutting edge technology and a robust, growing feature set
  • Advanced edition is packed full of top analytics and powerful quote display features plus bundled news and free agricultural weather maps
  • Professional edition is everything obtained in Advanced plus sophisticated new quote views and options analytics
  • All new Wireless edition to track the markets on the go; around the world
  • The best market combination of sophistication, usability, performance and price for accessing CME Group products

Source: CME 06.10.2008

Filed under: Data Management, Exchanges, FIX Connectivity, Market Data, News, Standards, , , , , , , , , , ,

FIX: Gateway to India

Capital markets boom

Thanks to this increasingly sophisticated financial workforce, as well as a generally liberal regulatory policy over the last few years, the Indian capital markets are maturing rapidly. Although the equities market is currently lagging as a result of the global economic downturn combined with high inflation-a recent Financial Times article rates India’s equities market as the worst performing for a large emerging market-derivatives trading is now big business. India has one of the largest single stock futures markets in the world-just four years after it was introduced. A new power exchange was recently launched and a formal mechanism for trading currency futures was expected to be up and running by the beginning of this month.

Foreign participation in Indian markets has grown steadily over several years and shows no signs of abating, and regulatory changes mean that domestic brokerage firms are starting to enjoy a larger slice of the business. In the past, foreign buy-side participants that wanted to trade securities in India had to do so via participatory notes-also known as P-notes-which were mostly distributed by international tier-one brokers, who would buy and sell shares on behalf of the foreign player. Typically, international buy-side firms went with international brokers that had offices in Mumbai, and the local brokers didn’t see much benefit from the foreign investment in their country, says Nelson Cheng, business development manager for the Asia-Pacific region at trading systems provider Fidessa.

However, this dynamic is changing. Foreign firms wanting to participate in the Indian market must now register as Foreign Institutional Investors (FIIs), and this has opened up a lot of opportunity for local brokers, according to Cheng. “Once you qualify as an FII you can go to local brokers as well as international brokers to get access to the market,” he says.

Indian brokers need FIX connectivity to attract international order flow and many have made significant investments in FIX networks and order management systems (OMSes). Financial Technologies (FT), an Indian trading and exchange technology provider, saw 95 percent year-on-year growth in the number of trading licenses for its Odin OMS, from 164,000 in March 2007 to over 320,000 in March 2008.

Surprise DMA Introduction
This year, new regulatory changes are opening up the markets even more for foreign participation. The Securities and Exchange Board of India (SEBI) announced in April that it would allow the introduction of direct market access (DMA) for equities, futures and options, and about a dozen brokerages in India launched this service with a few clients this summer. Vendors are also busy-FT recently launched DMA Live!, its direct market access solution, providing international market connectivity to over 80 percent of the domestic brokerages.

Boston-based research and analysis firm Celent estimates that between 40 and 50 brokerage firms and around 80 domestic and foreign buy-side firms will use the DMA channel by 2010.

The possibility of DMA in India had been widely discussed, but nonetheless it came as a surprise to many market participants when the SEBI announced that DMA would be permitted from April this year. “The general consensus in the market was that DMA in its entirety would still be at least 18 months to 24 months away,” says Athul Kudva, director at Indian trading technology provider Omnesys. “If you look at January and February, the markets were booming and generally the regulators are wary of opening the doors for such things when the markets are booming,” he says. One-touch DMA, requiring manual intervention from the broker, had already been permitted for some months.

DMA traffic accounts for 15 percent to 18 percent of total trading volumes in the US and 8 percent in Europe, and these numbers are growing fast, according to a Celent report, Impact of Direct Market Access in India, by senior analyst Sandeep Hebbar. In these developed markets, DMA adoption has helped drive down costs, provide better execution quality, better market and liquidity aggregation and better compliance with regulations, according to the report. Emerging markets regulators and participants have seen the effects that electronic and algorithmic trading have had on the developed world’s markets and are keen to reap some of the benefits for themselves.

India is not alone-DMA is also currently being introduced in Brazil, Chile, Mexico and Columbia. This is made possible by the widespread adoption of the FIX protocol over the last two years, says David Meredith, CTO at Marco Polo. As well as providing FIX network connectivity to emerging markets, Marco Polo provides gateway technology to the exchanges themselves, enabling emerging markets participants to be up and running relatively fast. “Developed markets took a long time to adopt DMA, but because clients in those developed markets are now very used to FIX, we’re seeing very high demand in emerging markets from day one,” he says.

Exchanges Respond
Industry insiders expect trading volumes to surge within the next year or two as a result of DMA, and firms and exchanges are working fast to make sure their systems are ready to handle the additional traffic.

The National Stock Exchange of India (NSE) is currently migrating from an x.25 network to a TCP/IP network in order to offer faster market data updates. The NSE does not currently distribute market data on a tick-by-tick basis, but sends snapshots of its order book to trading participants at regular intervals. “Depending on the liquidity of the securities, market data is sent every two to three seconds or even every six to seven seconds,” says Omnesys’ Kudva. The existing x.25 network distributes data at 128 kilobits per second (kbps). The new TCP/IP network, scheduled to go live on Oct. 31, will transfer information at a rate of 2 megabits per second (Mbps).

Latency can be a major issue in India, where market data delays have been known to reach 30 minutes during trading peaks. “A couple of months ago, we had a pressure scenario on the expiration date, and the system got so jammed up that even after the close of the market we were still getting the confirmations from our trades,” says Centrum’s Shah. With such delays, traders run the risk of buying or selling securities at an inaccurate price. “The exchanges needed to improve their infrastructure completely-they have realized this and are working on it,” Shah says.

While both types of networks are constrained by the speed of light, the new IP network will be able to process a much larger number of orders simultaneously, resulting in fewer network jams, says Frédéric Ponzo, managing director of Net2S, a Paris-headquartered capital markets technology consulting firm. Although in an IP network latency for a single order is increased because of the need for firewalls-x.25 networks do not require them-the additional bandwidth means that for a basket of 20 orders, network latency is reduced by a factor of six, Ponzo says.

Not to be outdone, the Bombay Stock Exchange (BSE) recently announced a deal with Transaction Network Services (TNS), which will allow international brokers to participate on the exchange more easily via TNS’ secure trading extranet. Previously, access to the BSE for trading and market data was limited to participants that had set up offices in India, which were typically connected to the exchange via leased lines. The exchange hopes the new setup will reduce the number of network management issues faced by the BSE and its customers, according to exchange officials.

Both the BSE and the NSE have seen tie-ups with overseas exchanges. BSE signed a technology agreement with Nasdaq OMX Group in January this year and NYSE Euronext bought a 5 percent stake in the NSE in March.

The Volume Explosion
Even before the rise of DMA, trading volumes had increased dramatically over the last few years, putting a strain on the exchanges’ existing infrastructures. Foreign participation, a growing retail segment, the dematerialization of shares, the reduction of transaction costs for some securities, the successful introduction of stock lending and borrowing as well as single stock futures and options trading have all played a role in increasing volumes, sources say. Combined daily trading volumes on the BSE, the NSE and the NSE futures and options exchanges hit a peak one-day high of $34.49 billion in October last year, up from $1.8 billion just five years ago. The current global economic downtown resulting from the sub-prime mortgage fiasco means that volumes are down-$14.5 billion on Aug. 13-but most industry participants are confident the markets will bounce back.

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Source: Waters Online, By Emily Fraser, 01.09.2008

Filed under: Asia, Brazil, Colombia, Data Management, Data Vendor, Exchanges, FIX Connectivity, Hong Kong, India, Japan, Latin America, Market Data, Mexico, News, Trading Technology, , , , , , , , , , , , , , , , , , , , , , ,