Swiss broker UBS has extended its UBS Price Improvement Network (UBS PIN) crossing service to Singapore, becoming one of a handful of off-exchange venues in the market.
UBS PIN joins Credit Suisse's Crossfinder and BlocSec, the crossing network owned by brokerage CLSA, which launched in Singapore in May 2008. Other alternative sources of dark liquidity active in Singapore include Chi-East, a joint venture between the Singapore Exchange and global venue operator Chi-X Global, and Liquidnet, which operates a block crossing service for Singapore-listed shares.
UBS PIN is a discretionary crossing network, which matches client flow at the mid-point. The venue allows client orders to anonymously match with other UBS client liquidity while their orders are being routed to the market.
Since spreads are typically higher in Singapore than in surrounding Asian markets – average spreads in H1 2011 stayed close to 60 basis points, compared to 25 in Hong Kong and Australia and 20 in Japan – dark pool users can often gain price improvement near half the spread by crossing at the mid-point.
“UBS's deep and diverse trading flows from our institutional agency clients provide unique and tangible benefits, and UBS PIN offers seamless crossing opportunities with complete confidentiality,” said Yang Xia, head of direct execution in Asia Pacific, UBS.
Currently, market participants are allowed to trade orders above S$150,000 or 50,000 shares off the Singapore Exchange only if they are reported to the exchange within 10 minutes of execution. Crossing networks are also required to submit regulator trade reports to the Monetary Authority of Singapore and maintain an audit trail of their trades. While intended to maintain transparency in the Singapore market, it is widely thought that these rules have restricted the growth of broker crossing networks in Singapore.
UBS PIN is already live in Hong Kong, Japan and Australia.
David Rabinowitz, head of direct execution technology, Asia, told the TRADEnews.com that UBS PIN in Singapore will contain no proprietary or high-frequency market making flow for the immediate future.
Rabinowitz also confirmed that UBS intends to roll out its smart order router in India in Q4 this year following regulatory approval in Q3 2011.