THE establishment of the Asean Trading Link plays quite a large role in
facilitating and increasing the accessibility of inter-Asean trade.
The link provides the connection
on a single platform for seven different exchanges in six different countries
to create more investment alternatives for investors.
Bursa Malaysia, Hanoi Stock
Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, The Philippine
Stock Exchange, Singapore Stock Exchange and the Stock Exchange of Thailand had
decided to collaborated under Asean Exchanges to drive Asean investment
opportunities to other countries and to build Asean to have a world benchmarked
asset class.
However, the connected exchanges
would not be able to function well if not for a technologically advanced
platform that would enable the connection in the first place.
Software and technology company
SunGard, took on the onus of creating a trading platform for the purposes of
the link. In June, the company announced that it had been selected for the
task.
Now, SunGard in Singapore
supplies the infrastructure for the link via its trading solution suite Valdi.
Investors are now able to route
orders to the two exchanges that have joined the link, namely the Singapore and
Malaysia exchanges, and receive market data from each via the central point of
connection.
Account director for South-East
Asia and India for SunGard's capital markets business Mathias Bellancourt tells
StarBizWeek that the link would enable larger brokerage firms to have access to
multiple trading platforms but this may require a significant investment from
the brokerages to have ease of facilitating trades.
“The Asean Trading Link enables
access through existing infrastructure to the respective exchanges, thus
allowing brokers to focus on business and building key relationships, reducing
the need to focus on connectivity,” he says.
He adds that the smaller
brokerages that tend to focus on domestic markets are now able to immediately
broaden their products and services to their clients.
The trading link provides Asean
exchanges, which are currently the Malaysian, Singaporean and soon-to-join
Thailand exchanges with the ability to electronically facilitate cross-border
trades.
Bellancourt says the system has
been designed to match the standard of the exchanges. Should a higher capacity
be required in future, the link can easily be upgraded.
“It has been through rigorous
testing to ensure that it is on par with the standards set by the exchanges and
compliant with local regulatory requirements,” he says.
He adds that the measure of the
infrastructure's complexity is relative to the different geographical areas, in
view that the link connects exchanges and multiple brokers in different Asean
countries.
“The link has been designed to be
an “out-of-the-box” solution where an institutional investor already connected
to one of the participating exchanges, can start accessing the link using their
existing setup (with the necessary commercial arrangements with the exchanges
in place),” he says.
With trading solutions that have
been used worldwide by brokers, investors need not worry as much, and have
peace of mind in terms of the security and effectiveness of the link.
Participants of the exchange will have to wait-it-out to see if the system
proves to be sufficient and effective enough.
In a statement that was released
earlier in June, SunGard president of global trading business Raj Mahajan says:
“SunGard's strategy is to help broker-dealers generate new revenue by helping
them navigate the global trading environment cost-effectively.”
It is worth noting that the link
will also be connected to the SunGard Global Network, so that brokers and
investors alike can send orders to other participating Asean members.
SunGard via its trade automation
and activity solution system SunGard Global Network, and its trading solutions
suite Valdi has supported accessibility into the Asean markets for many years.
“We will now work with the Asean
exchanges to tailor these technologies to their requirements,” Mahajan says.
The suite will provide global,
multi-asset class order management, market access, liquidity and compliance
management, as well as hosted services.
“The challenges would relate more
to managing the growth of our business with larger client bases in an efficient
manner, which is a “good problem” to have, if anything,” Mercury's Chew says.
The trading link is promoting the
Asean Stars, which feature a total of 180 blue-chip stocks representing 30
companies from each Asean country. These 30 companies are ranked by their
investability in terms of market capitalisation and liquidity.
“With the promotion of the Asean
Stars from the exchanges now available through a single platform, it is also an
important first step in introducing new investment opportunities to local
investors,” Bellancourt says.
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