Chi-East, the pan-Asian dark pool joint venture between Chi-X Global and the Singapore Exchange (SGX) has received approval by local regulator the Monetary Authority of Singapore to become a recognised market operator.
According to the platform's CEO Ned Phillips, Chi-East will launch trading in Australia, Hong Kong, Japan and Singapore by mid-November and already has backing from large sell-side firms.
“So far we have seen most interest from large investment banks that have made significant investment in electronic trading tools, but we are not looking to target any one kind of member in particular,” Phillips told theTRADEnews.com. “We expect the range of participants to expand once we have built up liquidity on the platform to include local and boutique trading firms.”
With regulatory approval now completed, Phillips indicates that the last steps towards launch only requires some initial members to complete final testing procedures.
“Our technology is stable and we are in the process of final testing with many clients, but most of the work is already done,” he added.
As well as being able to trade on behalf of clients, Chi-East will operate as an independent liquidity aggregator, allowing sell-side companies to cross their internal trading flows with each other.
Chi-East will use European clearing house LCH.Clearnet to provide central counterparty services for Japanese and Australian stocks. Singaporean stocks will be cleared through SGX's central depository, while Hong Kong-listed stocks will also be cleared through its own local infrastructure.
“Based on our experience in other markets, we expect the launch of Chi-East, as a pan-Asian platform, to complement existing marketplaces by supporting a more liquid trading environment in Asia. Over time, we believe this will attract new investors to the region,” added Chi-X Global chairman Fumiki Kondo.