The Asian equity trading desks of more than a dozen global investment institutions have formed a new representative body to promote best execution and forge closer links with regulators and exchanges in the region.
“Asia TraderForum will serve as a medium for buy-side traders in the Asia-Pacific region to discuss issues of common concern and express their views with a common voice,” read a statement from the new body.
“The rapid evolution of Asia's markets makes it more important than ever that the buy-side meets periodically to discuss best practices and monitor regulatory developments across the region,” said George Molina, senior vice president and Hong Kong-based director of Asian trading at Franklin Templeton Investments, who is also serving as the first chairman of Asia TraderForum. Molina has had previously held the position of co-chair of the Asia-Pacific regional committee of FIX Protocol Limited, the developer of the FIX financial messaging standard, which represents and coordinates activities on behalf of all elements of the securities trading industry in the region.
Among the charter members of Asia TraderForum are the heads of Asian equity trading at Capital Research, FIL Investment Management (HK), Franklin Templeton Investments, TPG-Axon Capital and T. Rowe Price Hong Kong. The group's inaugural membership meeting, held in Hong Kong earlier this month, included a keynote address by Hong Kong Exchanges and Clearing CEO Charles Li. Use of commission sharing agreements, which is less widespread in Asia than other Europe and the US, is understood to be one of the priority topics being discussed by members of Asia TraderForum.
A number of buy-side traders in the region have long felt a need to represent the interests and opinions of institutional investors separately from both Asia's local retail brokers and global investment banks and brokers. “Investment managers haven't been that successful individually in engaging with regulators and exchanges, so it makes sense to speak with one collective voice,” said one buy-side trader. Other sources noted that a body which represents the buy-side alone is less likely to be tainted in the eyes of regulators by the presence of commercial interests when highlighting the merits of dark pools for example. “The retail brokerage community carries a great of weight in many Asian markets while the institutional buy-side has tended to stay in the background.”
However, the lack of buy-side representation within the securities industry is far from a solely Asian issue. A number of heads of desks have individually and collectively made so far unsuccessful representations to the European Commission, as part of the consultation process for MiFID II, to highlight the potentially negative impacts of a proposal that trade reporting delays be shortened from three days to one.