Goldman Sachs is set to unveil a new Asian trading platform, including improved coverage of ASEAN markets. Traditionally, low volume ASEAN markets such as Thailand, Indonesia and Philippines have been challenging for traders.
“The same price controls we apply in developed markets apply in developing markets. You have to be watchful about not impacting the market or signalling from inappropriately sized orders,” said Ian Smith, a managing director in the securities division in Goldman Sachs, Hong Kong. He joined the firm in autumn 2013, having previously worked at Citi and Credit Suisse. Smith now runs regional Goldman Sachs Electronic Trading (GSET) sales in Asia and has a direct remit for day to day coverage of orders.
“From a fair and orderly market behaviour perspective, ASEAN is the same as other markets. From a trading logic perspective, it can be quite different. Also, there are a lot of names in the developing world that are not yet suitable for electronic trading and it is important to know which they are. The algorithms have to know about individual market behaviours in order to do a good job.”
Goldman has been working on the new platform for two years. It will include new innovations and is based on the bank’s platform currently being used in Europe and the US, with Asian algorithms developed locally. The current Asian platform will be discontinued.
“The new platform will use Asian algorithms built here in Asia. There are a lot of market nuances in Asia that make them different from algorithms used in other regions,” said Smith. “We hope to provide the next generation of intelligence around trading. What the platform brings is flexibility, being able to deal with constantly changing market nuances that clients request, and dealing with a fluid Asian environment. The platform does that robustly, which is relevant for the SFC’s new rules on testing and procedures.”
He was unable to comment on whether the launch of the platform will see increased Asian headcount for Goldman Sachs Electronic Trading (GSET).
GSET in Asia employs a set of developers who do not report to Smith and work more broadly across the organisation rather than purely for the GSET business. As a result, their development, quant and analysis skills are utilised across all businesses. Smith says that other firms may find this spread harder to accomplish because of their siloed nature.