From: Will high-frequency trading practices transform the financial markets in the Asia Pacific Region?
Location | Accelerating Factors | Decelerating Factors |
---|---|---|
Japan | Arrowhead launch at Tokyo Stock Exchange; low transaction fees, with average cost of 18.34 basis points in 2010; high fragmentation level for trading of equities; very small tick size; favorable regulations (Yoon 2010). | None |
Australia | Trading infrastructure recently upgraded; co-location services available; low trading fees at 15 basis points; Chi-X uses maker-taker pricing model (Mishkin 2011). | Low fragmentation level with only three exchanges in Australia’s market; and no transaction rebates (Securities and Exchange Commission 2010). |
Hong Kong | Automated Order Matching and Execution System (AMS/4) upgraded in 2011 (Aite Group 2011). | High stamp duty of 0.1Â % tax for ownership transfer of equity shares; low fragmentation level for individual equity grading; and an unfavourable regulatory environment (Gov.HK 2013). |
Singapore | Launch of ultra-fast trading engine, SGX Reach; co-location service; deployment of circuit breakers and risk controls as new market safeguards; proposed regulatory changes include offering rebates for ownership transfer fees and provision of liquidity to HFT traders (Malakian 2011). | High trading fees at 20 basis points; no market fragmentation with just SGX; new rules to regulate HFT operations in dark pools (Gov.HK 2013). |
China | Introduction of low-latency trading technology (Grant 2012). | Unfavorable regulatory environment; high network communication latency; T + 1 regulation; low-level IT support; high stamp duty (Grant 2012). |
South Korea | South Korea seems to lack basic accelerators for HFT trading to take hold and flourish (Kang 2012). | Implementation of a kill switch for trading (Song & Grant 2013); little investment in sophisticated trading technology and hardware infrastructure (Kang 2012); fees for equity trading (Barnes 2013). |
India | Launch of co-location service in 2010; direct market access available; approval of smart order routing in BSE; BSE reduced fees (The Trading Mesh 2011b, NSE 2014). | Low matching engine speed; low fragmentation level; NSE has high clearing and trading fees (The Trading Mesh 2011b); sometimes lacking liquidity in market to close out positions. |
Indonesia | Direct market access available (Valentine & Misra 2012). | Low fragmentation level with only one exchange: Indonesia Stock Exchange. |
Thailand | Direct market access available; trading platform technology upgraded; tick size reduced (Valentine & Misra 2012). | Low fragmentation level with only two stock exchanges: Stock Exchange of Thailand and Market for Alternative Investment. |
Malaysia | Direct market access available; platform technology upgraded; tick size reduced (Valentine & Misra 2012). | Low fragmentation level, with only one exchange; infrastructure is still too young for HFT development (Lim 2014). |
Philippines | Platform technology upgraded; tick size reduced (Valentine & Misra 2012); implmenention of broker anonymity (Valentino 2014). | Low fragmentation level with only one exchange: Philippine Stock Exchange. |
New Zealand | Favorable regulatory environment (Lynch 2013). | Low trading volume; no co-location service (Field 2014). |