Asian equity trading volumes climb 33% over 2005
GREENWICH, Conn. — Asian equity market trading volumes climbed to $1.2 billion in 2006, up 33% from the previous year, according to a study released by consultant Greenwich Associates. The firm’s 2006 Asian Equity Investors Study found that the amount of equity commissions paid by institutions based in Asia to brokers on trades of Asian (ex-Japan) shares were driven by outsized returns and an influx of hedge funds. Hedge funds comprised nearly one quarter of the brokerage commissions paid on cash equity trades of Asian shares last year, up from approximately 5% in 2004, the study found. “The increasing presence of hedge funds is influencing regional equity markets in several important ways,” Greenwich Associates consultant Jay Bennett said in a news release accompanying the study. “In addition to driving up overall trading volumes and commission payments, hedge funds also are affecting sell-side strategies in Asia through their preferences and spending patterns, and could help speed the spread of electronic trading throughout the Asian countries.”
CBOE to open stock exchange
The CBOE Stock Exchange, the equity-trading subsidiary of the Chicago Board Options Exchange, will make its debut on March 5. The CBSX’s start will coincide with the implementation of the Regulation NMS market reform that fosters trading technology for greater transparency and investor protection.
CBSX Chief Executive Officer David Harris said the new exchange will “offer a compelling value proposition with a focus on our trading community combined with a state-of-the-art trading system, and an extremely competitive fee structure.”
The CBOE, the world’s largest U.S. options exchange, worked with four Wall Street firms to launch CBSX: Interactive Brokers Group, LaBranche & Co., Susquehanna International Group and VDM Specialists.
CBSX will run on the same CBOEdirect platform that already powers the CBOE and the CBOE Futures Exchange. The new exchange will count on its parent’s strong ties with the options trading community and aggressive pricing to carve market share from the crowded U.S. exchange sector.
CBSX will be the 10th U.S. equity exchange.
BIDS crossing network draws investments
NEW YORK — The BIDS alternative trading system attracted investments from Bank of America, Bear Stearns, Credit Suisse, Deutsche Bank, JPMorgan and Knight Capital Group. The crossing network — which is in beta-testing and should debut this spring — is operated by BIDS Trading, a pure agency broker. It was founded by Citigroup, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS.
BIDS, which stands for Block Interest Discovery Service, will allow institutional investors to cross large orders off-exchange without market impact. Because it is an independent broker without proprietary trading, BIDS avoids the potential conflicts of interest presented by similar facilities of full-service brokers.
ITG expands clients’ algorithm access
NEW YORK — Investment Technology Group, a trading services firm, is connecting its users to major broker algorithms via its Triton execution management system. Besides ITG’s proprietary algorithms, ITG clients can access proprietary algorithms from Banc of America, BNY ConvergEx, Bear Stearns, Citigroup, Jefferies, JPMorgan, Lehman Brothers, Merrill Lynch, Sanford C. Bernstein and UBS. Clients can also set specific execution parameters. Andrew Larkin, managing director at ITG, said the change underscores ITG’s broker-neutral approach. ITG Triton connects customers to 90 brokers and all major alternative trading systems, electronic communication networks and exchanges.
