Upping the ante for the post-trade world
The first meeting of a new independent industry
body focused on post-trade issues, the Asia Clearing Council, will take place
on 15 June in Hong Kong.
The group, the brainchild of Barnaby
Nelson, head of client development for banks, broker-dealers and corporate
issuers in Asia for BNP Paribas Securities Services, is set to meet quarterly
to address issues thrown up by the ever-changing financial market landscape in
“Over the last 12 to 18 months, the
weight of market and regulatory change in the post-trade space has been getting
very, very heavy,” says Nelson. “If you look at what’s going on from a market
infrastructure perspective in places like Indonesia, Hong Kong and Singapore, there’s
so much change happening but not enough attention is being paid to this by
Nelson concedes that topics related to
post-trade, back office or operational issues are not the sexiest and it can be
a struggle to get some of the more trading-minded market participants to maintain
“What we are trying to do with the Asia
Clearing Council is take all of these issues and package them up into something
that is really relevant to brokers, something that CEOs, heads of sales and
heads of desks will find meaningful,” explains Nelson.
The topic-driven roundtable meetings will
take the form of discussions between invited participants on subjects about
which extensive research and consultations have been carried out. Nelson says
he has spoken to senior executives at “20 to 25 brokers over the last month” to
canvass them on the issues they want to see addressed.
“I’ve seen a few of these industry groups
come and go in Hong Kong and the formula this time is to have a clear profile
of what we’re going to address, rather than a coffee morning-type meeting about
things people feel like chatting about,” says Nelson.
One of the focus topics for the first
session will be alternative venues in Asia, a key market infrastructure
development affecting market participants across the entire region, but about
which there has been “limited amount of realistic conversation”, suggests
There are a lot of people who want
alternative venues in Asia to succeed but there hasn’t been much concrete
stocktaking of what the realistic landscape is, and how much scope there is for
them to succeed given the fact that the clearing for them is just so complicated
at the moment.
Alternative venues have been established
in financial centres across Asia, notably in Hong Kong and Tokyo, but unlike Europe
no pan-regional platform has thrived, in part because post-trade structures are
so tied into the incumbent exchanges.
Another topic that is likely to be on
upcoming agendas is liquidity, given the increased requirements for brokers’
collateral in the region, says Nelson.
“If you want to be an exchange member,
your collateral has just shot up by a multiple of ten in Hong Kong and is going
to go up by a multiple of ten in Singapore,” points out Nelson.
The next meeting is scheduled for
September and will have a focus on developments in ASEAN markets.