Published On: Sat, Mar 5th, 2011

Trade Tech China 2011 Highlights

Trade Tech China 2011TradeTech held their 3rd annual conference in Shanghai this past week which provided a great opportunity for interaction with many Chinese buy-sides, the exchanges and local brokers. The event, also combined a one-day session on Exchange Traded Funds (ETF), which China, with Hong Kong, is the biggest ETF market in the world.

The keynote panel on day one looked at how the buy-side is changing and what their expectations and understanding was of best execution. Best execution was characterized by speed and not quality. Then we heard from the CSRC on how the futures market is regulated and what the future holds.

JP Morgan’s Kathryn Zhao held an interesting discussion in the afternoon on the micro structure changes for exchanges who extend their trading hours under the premise that it will increase trading volumes (Article to follow). Great research indeed!

Day two started with a technology panel with China’s Big 3 Exchanges, namely Shenzhen, Shanghai and Hong Kong. They talked about the developments at their respective bourse and highlighted their co-operation. Nothing was mentioned of competition however.

We also heard from Guosen Securities, who just deployed Kx Systems’ database kdb, on how they were developing sell side algo’s in China and what the China market holds for advanced execution services. Trading in China is more than 95% DMA where brokers put their algos in the office of each buy-side who then trade directly with the exchange.

There was much more going on with a discussion on both the QDII and QFII rules and its effect on shaping the trading ladscape in China and a look at how much Straight Through Processing (STP) is prevalent in China.

With all the discussion on the trading environment in China on the second day, unfortunately, I spent little time listening to the ETF side of the conference but Russell and Blackrock were both in attendance among others.

While I was disappointed at the quality of the mandarin translation and it was widely held the food could have been better the conference drew a large contingent of buy-side, interesting discussions and lots of networking opportunities. See you in 2012.

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