Investors encouraged to better utilise low latency in Asia
Partners, a capital markets consultancy, has revealed low latency offerings
in Asia have become mature enough for firms across the region to remain
competitive but investors need to upgrade their infrastructure and technology
to reap the rewards.
report, ‘Low latency in Asia-Pacific: an infrastructure view’, advises Asia-Pacific
market (APAC) participants to be proactive in adjusting and updating their
technology roadmaps to compete on a global scale. The report also provides
insight into market fragmentation across APAC, noting a strong understanding of
the markets, unrestrained infrastructure and co-located equipment is crucial to
benefitting from low latency environments.
competition, particularly in electronic trading, which has become the de-facto
trading method at multiple venues, has meant that pursuing a successful latency
strategy is key. For APAC, where distances are greater, the network latency can
play a key role in the overall latency. A well-thought out equipment
collocation strategy, therefore, can be a game-changer,” said Andrew
McLauchlan, managing director of GreySpark’s Asia-Pacific operation.
report noted that reduced latency had become a vehicle for exchanges to gain a
competitive edge. All major APAC exchanges have recently upgraded their trading
platforms. These platforms are also becoming more standardised, with many of the
upgraded platforms using low latency, white-labelled technology from global
exchange software providers.
despite APAC exchange initiatives to seek low latency solutions, regulatory
constraints in individual markets have so far had a negative impact upon high
frequency trading (HFT). According to GreySpark, in Asia, HFT stands at just 10%
of total volumes, which is low compared with 40% in Europe and 60% in the
By Sophie Pallier