The Singapore Exchange (SGX) has become the latest Asian bourse to commit to an extensive overhaul of its trading platform, while the Australian Securities Exchange (ASX) has adjusted its pricing to attract volume ahead of its own market revamp.
SGX’s new platform, called Reach, will be powered by Nasdaq OMX’s Genium INET trading engine, data systems provider Voltaire’s InfiniBand solution and Hewlett-Packard technology. Reach will be rolled out in the first quarter of 2011, beginning with cash equities, and is expected to cost SGX US$250 million.
“With Reach, Singapore will become even more accessible to greater numbers of investors including international traders seeking the next generation of growth opportunities,” said Magnus Bocker, CEO at SGX. “The investment also reaffirms SGX’s commitment to provide global reach for Asian issuers.”
Nasdaq’s Genium INET technology is capable of delivering roundtrip latency times of below 200 microseconds, with a throughput of one million messages per second. During testing at HP’s Singapore Capacity Planning Centre, SGX reported that benchmark latency tests achieved order response times of 90 microseconds.
SGX will also develop a new data purpose-built data centre at Keppel Digihub, which will house its trading, market data and clearing infrastructure, as well as offering a range of new co-location services. As part of the Reach project, SGX will also establish a presence at data centres in Chicago, London, New York and Tokyo to lower cross-border connectivity costs and facilitate low-latency strategies by international trading firms.
“Customers which co-locate their trading applications with SGX’s trading engines will be able to capitalise on new trading opportunities,” said Gan Seow Ann, head of markets at SGX. “We are delighted that 40% of our broking members have already signed up as the first batch of subscribers.”
Singapore joins the incumbent Japanese and Australian in revamping its trading capabilities. The Tokyo Stock Exchange launched Arrowhead, its next-generation trading engine, in January.
ASX, which is gearing up to launch its new trading system, ASX Trade – also powered by Genium INET – in November this year, has adjusted its fee schedule to coincide with the launch of new trading platforms at the start of Q3.
From 1 July, trade execution costs on ASX’s central limit order book, will be 0.15 basis points, down from 0.28 bps currently. On-market crossing and off-market crossing charges will also be reduced, to 0.1 bps from 0.15 bps and to 0.05 bps from 0.075 bps respectively. Fees for CentrePoint, a new order type designed to trade large orders anonymously, will be 0.5 bps for undisclosed and non-crossing orders, and 0.15 bps for mid-point crossed orders. Iceberg orders, which are due to be launched in November, will be charged at 0.5 bps. The exchange will also drop its large participant rebate scheme, which rewards participants for trading over certain thresholds.
The ASX plans to launch three new trading platforms within the next year. VolumeMatch, which is due to go live on 28 June, will cater for large executions, TradeMatch will cater for the exchange’s existing traditional customers from November, while PureMatch, a high-frequency friendly order book is scheduled for launch in Q1 2011.