Published On: Fri, Apr 8th, 2011

Trade Tech India 2011 Highlights

The third annual Trade Tech India was held in Mumbai this past week. The 2 day conference offered a unique and excellent opportunity to discuss and meet with India’s electronic trading industry.

The conference began with the keynote address from J.N. Gupta the Executive Director of the Securities Exchange Board of India (SEBI). He talked about how the regulations have been changing to begin bringing India up to a world class standard with the end investors’ protection as the focus of this change. He deftly avoided questions at the end of his talk, however.

The highlight event was the next panel moderated by Eugen Tjong the Head of Enterprise Solutions for Asia at Thomson Reuters. He was charged with refereeing the discussion with Ravi Ape the CTO of the NSE and Ashish Chauhan of the BSE. The combatitive Ashish made a point of highlighting some of the barriers the NSE had thrown up as the BSE competes in India as the panel unfolded. The body language also revealed their angst as both were slightly pointed away from the other. It should be noted that the BSE was found in the 1850s and that overtime the exchange engaged in monopolistic practices until 20 banks in India came together to form the NSE and offer an alternative venue. The NSE is now the dominate exchange in both equities and futures.

The next panel was on Smart Order Routing in India. SOR was recently granted by SEBI last October which has since approved 11 SOR providers. The panelists were all in favour of Smart Order Routing if they could realize a better price for their client but didn’t quite understand the need for measuring price improvement performance with tools such as transaction cost analysis. It became clear that the cost to enter the SOR space and the lack of understanding of true best execution would find SORs largely in the hands of western brokers. Talking to one investment bank broker he said he didn’t see the real need for SOR given that spreads on the NSE are around 2 to 3 bps anyway and the cost of clearing would negate the savings in any price improvement.

Greg Lee Head of Autobahn at Deutsche Bank gave us a great presentation on how the market microstructure of India has changed at both the BSE and NSE over time as DMA and algorithmic trading have come to bear. Hopefully, we can have his time series, animated, presentation available at AsiaEtrading.

Peter van Cleef, CEO of Lakeview, gave a very detailed presentation on where the West’s trading landscape is and what the Indian market can expect to achieve.

Throughout the remainder of the first day was a buy-side panel discussion and another on algorithmic trading, a presentation by Celent and Cisco.

In a first, TradeTech India held an awards ceremony for 6 categories which saw Credit Suisse and Kotak Securities, among others, take home prizes. This was followed by a networking cocktails which had a very high attendance. In fact, all of Day One saw a large number of delegates.

Day two wasn’t as well attended but offered some interesting discussions all the same. The second day was chaired by Roopchand Betala, CEO of Volvie Capital Management. Mr. Betala was also host to a pre-TradeTech dinner which was a great way to start the conference and enjoy some Indian culture too.

We heard discussions on India’s asset management industry, mobile phone trading and high frequency trading too. The Tokyo Stock Exchange also presented on HFT as an example of what the India market can expect. The conference ended in some round tables with a follow-up of those outcomes presented to the delegates.

I think it was widely agreed that the venue, while suitable and very nice, was not ideal to hold the conference as it was near the airport rather than the central business district. Other than that the conference was a great success and saw many buy-side, industry participants and networking opportunities in one of the worlds and certainly Asia’s rapidly evolving electronic trading industry.

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