Fidessa explores the future of equities trading in Australia
New white paper discusses practical implications of market fragmentation in a global context
Sydney, 3rd August 2011 - Fidessa group plc (LSE: FDSA), provider of high-performance trading, investment management and information solutions for the world’s financial community, has today announced the publication of the first in a series of white papers exploring the impact of multi-market equities trading in Australia, following changes to its market integrity legislation. The paper, entitled Aussie Rules – The New Trading Landscape for Australian Equities, puts the Australian experience into a global context and investigates how all parties involved can best adjust to meet the challenges ahead.
Fidessa’s paper assesses the practical implications of the regulatory framework established by the Australian Securities and Investments Commission (ASIC). It compares these to similar developments in other key geographies, notably MiFID in Europe, RegNMS in the US and UMIR in Canada, highlighting important differences that will determine the unique characteristics of the Australian marketplace as it evolves.
Steve Grob, Director of Group Strategy at Fidessa, says: “Market fragmentation has become an inevitable global force, driven by a combination of demand, regulation and technological capability. The Australian trading landscape is now going through a period of rapid transformation and re-alignment in much the same way as Europe and North America have experienced. The Australian marketplace will naturally form its own unique identity, but regardless of its eventual form, the changes will have significant consequences for all parties involved in trading Australian equities.”
The paper considers the role to be played by Smart Order Routing (SOR) technology and suggests that success in the new marketplace will depend on firms’ abilities to combine routing across lit and dark liquidity with intelligent, end-to-end workflow. It concludes SOR technology must have the specific features demanded by the Australian marketplace and a proven and demonstrable ability to scale as conditions change.
Grob adds: “Evidence from elsewhere suggests that the widespread adoption of essential SOR technology will increase the pace of change and we expect many players in Australia will re-evaluate where they fit in the trading landscape. The new field of competition for providers of SOR solutions and intelligent workflow has moved to the Southern Hemisphere and it will be fascinating to see how it plays out.”
Subsequent papers in the series will address the specific issues for retail and institutional investors, brokers, high-frequency traders and venues in more detail. Aussie Rules – The New Trading Landscape for Australian Equities, is available through the Fidessa website, fidessa.com, or by contacting fidessa.com.PDF (0.03 MB)