Barclays to accelerate Asian rollout of electronic product

Barclays will complete the introduction of a suite of volume algorithms in Asia during the remainder of this year.

Barclays will complete the introduction of a suite of volume algorithms in Asia during the remainder of this year.

In 2014, the firm will also bring its liquidity-seeking algorithms into Asia. Hydra is the name of Barclays’ liquidity seeking algorithms in US and Europe but that product is yet not live in Asia. 

The evolution into liquidity-seeking algorithms will go hand-in-hand with Barclays’ dark pool capabilities.

Next year, the firm will selectively release its dark pool, “LX”, (“Liquidity Cross”). That has already been live in Japan for two months. It is likely to be introduced into Hong Kong, as well as Australia and Singapore, pending the necessary approvals.

“We chose to roll out a global suite across Asia with an Asian market microstructure overlay,” said Jonathan Green, Barclays’ head of electronic sales for non-Japan Asia and program trading, pan Pacific. “We have a team of quants in Hong Kong and in Tokyo who have been working for three years to build out a local offering.”

Barclays acquired post-bankruptcy Lehman assets in 2008 in the USA, but it did not acquire Lehman’s Asian assets (those were bought by Nomura).

The firm therefore had a strong platform in the USA, which was a legacy of the Lehman technology. The decision was then taken to base new systems development in Asia upon that platform. The firm has built a cash equity presence in Asia almost from scratch since then. That process began in Japan in 2010.

“In the initial stages we have been emphasising stability. We’ve been focusing on a volume suite to begin with. In its most comprehensive form in Asia, we have a suite that incorporates ten algorithms,” says Green. “We don’t have plans to add on multiple iterations. As we roll out the rest of this year and move on into 2014 and 2015, we will move into the realm of greater customisation of those algorithms.”

The introduction of the product has taken place in countries where Barclays already has a large presence. Japan, Hong Kong, Korea and Taiwan have been local markets where they have already released the volume algorithms.

One country is a notable exception. Barclays is not looking at India for its electronic product until next year, as it involves extra work in getting the algorithms onshore. It means building a local order management system onshore that houses the Indian market microstructure overlay.

Barclays operates with relatively lean coverage team for its electronic business, with desks in Tokyo and Hong Kong. It has no immediate plans to increase manpower resourcing.