Almost 68% of proprietary trading firms are planning to trade on new exchanges in 2024, Acuiti’s proprietary trading management insight report has found.
Asia-Pacific, and Brazil were touted as key areas of focus for firms as they looked to grow, with onshore India specifically cited as a region for expansion by various respondents.
The breadth of opportunities available when it comes to trading in fresh jurisdictions, is clear to see by various recent market moves which has seen a surge in partnerships and investments across both frontier and emerging markets.
Speaking to The TRADE in October, emerging markets expert Mark Mobius highlighted the significant potential of these jurisdictions specifically: “The big boy on the block is going to be India for of a range of reasons, they’re developing at an incredible pace, for example their technology which is getting better and better every day. India is definitely number one on the list.
“[…] We’re finding companies that are most profitable and have great growth opportunities in Brazil, Taiwan, South Korea, Turkey, South Africa.”
Read more: Mark Mobius sits down with The TRADE to discuss the ever-evolving emerging markets space
Following a strong start to the year, sentiment is soaring across the prop trading landscape. Looking ahead to the next three months, 24% of respondents stated that they were ‘very optimistic’ about the environment for their business performance.
Over half (51%) of those surveyed were also positive, responding that they were ‘quite optimistic’. No firms held a negative outlook, with the remaining 24% neither optimistic nor pessimistic.
Elsewhere, the report found that as prop firms continually look to further expand their reach globally and continue to confront the ever-increasing regulatory burdens, there is a clear disparity in terms of approaches either side of the Atlantic.
Read more: Regulators ponder global conformity in the face of regional disparity
Senior executives from EU firms were found to be spending significantly more time on regulation than their US counterparts.
Almost half of EU-based proprietary trading firms were found to spend between 26% and 50% of their time on regulations, whereas in the US 70% of those surveyed responded that typically just 1-10% of their time was spent on regulations.
Will Mitting, founder of Acuiti, explained: “This quarter’s report highlights the extent of the challenges facing firms.
“One major issue for both firms in the EU and the UK is that new rules coming into force are typically automatically applied to Mifid II registered firms. So, while the initial regulation contained within Mifid II was appropriate, the level of increased rules over the past decade is creating significant pressures on firms.”
The report surveyed senior executives from more than 100 proprietary trading firms globally.