Continuing its effort to promote dialogue on issues of importance to the industry, RTS hosted its second annual Market Chat series during the 24th annual FIA Futures & Options Expo on November 12th.  John Howard, Publisher of Automated Trader magazine, moderated the discussions this year.

The panel entitled “Asia on the Horizon” featured Thomas McMahon, President of the Hong Kong Mercantile Exchange; Matthias Rietig, Vice President, Business Development for the Osaka Securities Exchange; Nick Ronalds, Head of FIA Asia; and Henk Huitema, Managing Director of RTS Asia Pacific.

The panel explored topics including Asia's resilience to the current global financial crisis; the growth of algorithmic trading across Asia and ways in which exchanges are meeting demand for it; how the meaning of direct market access (DMA) differs in Asia; global execution; commodities trading, and the impact of Hong Kong's regulatory environment. 

Rietig identified three trends in 2009 that will occupy the time of OSE officials. He said: “In the case of Japan, the biggest change will probably be for liberated access from outside of Japan, so it’s a new concept for Japanese exchanges to have remote members. And that will be probably very conducive to volumes that we will see. Apart from that, we will see a trend towards high frequency / low latency because there are a lot of people coming in that want to trade that sort of style in the Asian markets. Also in Japan, we will see some consolidation among the exchanges. So those are the things that will keep us busy in the short term.”

Ronalds articulated the significant challenge FCMs face in establishing and maintaining a strong presence throughout Asia. “The biggest challenge for FCMs in Asia is the enormous diversity of Asia,” he said.  “From a distance, we can say Asia, but that’s many countries, many legal systems, many regulatory systems, many processing systems.  And the challenge is getting timely information, keeping up with all of the developments on all the exchanges so that you can stay on top of it, so that you can make sure your clients know what’s going on and have the information they need to execute their strategies, and that’s tough.”

McMahon described the technology advantage the HKME enjoys:  “We’re fortunate. We don’t have the legacy issues of the other exchanges,” he said.  “We’re the new kid on the block….I started from scratch. I didn’t have to have Windows-based systems, and I’ve got very low latency and strong compatibility to how people want to access us from day one.  We see that as an advantage.”
  
Huitema discussed the high level of demand from clients for expanding their opportunities in Asia.  He said: “The feedback in the market is that Asia is a growing market, specifically for a vendor like ourselves and other people in the market. You see more and more people wanting to trade in the market, so therefore from our perspective, Asia is a driving force for extending our business.”

The first panel was “Market Trends,” featuring two outspoken panelists:  John Lothian, publisher of the popular “John Lothian Newsletter,” President of the Price Group and founder of MarketsWiki, (see Interview in Screenshot 12) and Jon “Dr. J.” Najarian, co-founder of Option Monster and frequent television commentator. 

The three “Johns” conducted a lively discussion on a range of topics, including market volatility; the role of regulators and the government in regard to markets, short selling restrictions, the global credit crisis and unemployment; and ultra low latency trading environments.

To view the Market Chats in their entirety, visit:

Asia on the Horizon   http://www.automatedtrader.net/announcements-4474.xhtm.
Market Trends   http://www.automatedtrader.net/announcements-4361.xhtm