The FIXGlobal Face2Face forums were born from a growing need for frank and educational discussions around what is actually going on in markets developing their electronic trading capabilities and practices. Face2Face China 2009 was no exception. Both local and international buy and sell-side firms were strongly represented, (making up two thirds of an approximately 200 plus crowd), and actively participated in the lively ‘question times’ following the forum panels/presentations.

Grace Lin from Citi, Gavin Williamson and Alan Dean from HSBC opened the day with a series of global updates on electronic trading trends and innovations, as well as highlighting the key business drivers for asset managers / exchanges and brokers to develop their electronic trading and FIX capabilities. From the very start of the day, questions/observations from the audience were hot on the heels of each presentation or panel, on subjects from Flash Orders to the speed of FIX;

The exchange focused sessions of the day provided insights into the Shanghai Stock Exchange development and implementation of FIX STEP/FAST with Dr. Bai Shuo (CTO, SSE) describing it as FIX with the specs components not relevant to China removed, in order to streamline it to the China market. The performance figures offered left delegates in no doubt that through the use of FIX STEP/FAST Shanghai is getting ready to provide scalable capabilities for the benefit of market participants. Eric Yip, Head of Cash Markets for Hong Kong Exchanges and Clearing Limited made some illuminating points about the global developments of electronic trading and some of the resulting lessons learned. Mr. Yip noted that changes in the Hong Kong marketplace would be driven by market participant demand and regulatory guidance. He also affirmed HKEx’s commitment to continuous improvement in market infrastructure. Along those lines, HKex recently become a member of FPL and is in the process of assessing the FIX Protocol for their cash market.

Turning the spotlight on China market participants, a technology panel discussed the effective exploitation and implementation of existing and evolving technology tools. A discussion on ‘build or buy’ lead directly into a debate on the role of foreign vendors in the China market.

Kathryn Zhao from Deutsche Bank , used a presentation of trading data collected from the NYSE, Hong Kong and Shanghai markets, to compare volatility characteristics over the financial crisis. Very well received by the delegates, the stats spoke for themselves on the impressive liquidity and relative lack of volatility on the Shanghai market over the period covered. Looking to the future, Mark Maloney of Deutsche Bank led a panel of international sell-side and local buy-side professionals to discuss the possibilities.

Talk of algos continued, with a demonstration of an algo being used and during the ensuing panel discussion. The demo by Mr. Shen Tao of Guosen Securities, plainly demonstrated to the audience the simplicity to trade efficiently using algorithms, and as one of China’s largest broker firms, (with 50 million accounts on their books) the point was well taken. Additionally, (and another illustration of the strides forward that China is making in this arena), one of the algos highlighted had been created using ATDL, the algorithmic trading definition language developed through FPL, which is still being tested elsewhere. The panel discussion concluded with a clear message; that algos will develop very fast in China, as will the efficient exploitation of electronic trading and FIX capabilities being developed inside and outside China.