Signs of a Possible High-Frequency Trading Boom in Asia, Including Hong Kong, Japan and Singapore

(www.seetell.jp)

As Fierce Finance IT’s Jim Kim reported, at a time when high-frequency trading continues to generate controversy and regulatory action in the United States and Europe, exchanges in other parts of the world are ramping up to attract more high-frequency trading. Japan, Singapore, Brazil and to a certain extent Hong Kong are leading this movement.

A poll last year by Thomson Reuters found that 54 percent of buy-side and sell-side respondents point to the United States as the country offering the most potential–not surprising–but 24 percent said emerging markets was now their top choice, a decent showing.

We’ve suggested that Asia looms as the next major high-frequency trading hot spot. By one estimate, speed traders now account for around 15 percent of Asia-Pacific equity trading volumes and this number is expected to grow.

More firms are setting up shop in the region, notes Financial News. The list includes Citadel, Getco, Jane Street Capital and Optiver. Bulge bracket firms such as Credit Suisse and Morgan Stanley are also eying the market.

For the moment, Japan reigns as the leading venue for high-frequency trading, accounting for nearly half of all activity in the region. But Singapore, via its Reach initiative, has designs on quickly becoming the fastest exchange in the area. Hong Kong is also upgrading its infrastructure. In preparation for more high-frequency trading, it even cancelled lunch, to provide a bigger trading window daily. That has Tokyo mulling shorter lunch hours as well.

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