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Kuala Lumpur, Malaysia
26 May 2010

Connecting the FIX Community

The FIXGlobal Face2Face forum returned to Malaysia this year, once again with the support of Bursa Malaysia, a telling sign of the involvement of the Exchange in the use of FIX as a standard and being at the forefront of innovation in the region. With over 140 delegates attending, the trend was clear, that participants from the local Buy-side, Sell-side and Vendor communities had upped their interest in how Electronic Trading and FIX as a standard could optimize their businesses. This development was very encouraging, especially in a market that is in relative electronic trading ‘infancy’, possibly “Only a 1/3rd of the way up the curve, in comparison to the US and the UK”, as First Derivatives’ Rob Hodgkinson put it. The upside is clear with the community wanting to know more about how to become involved.

International competition has arrived in Malaysia and the Exchange underlined this to the delegates, with Mr. Chua Kong Khai, Deputy Chief Market Operations Officer and CIO Mr. Lim Jit Jee giving their updates on DMA, co-location capacity, the ASEAN Link (a cooperative initiative across 6 ASEAN exchanges) and Bursa Malaysia’s partnership with the CME on the Globex platform.

• DMA was launched for derivatives March ‘08 and for Equities in November ‘09 and even though the exchange is currently only seeing volumes on the derivatives side, the growing demand for lower latency should see uptake accelerate on the equities side.

• The exchange informed the industry that they have 4,000 square feet allocated for co-location with room to expand.

• The ASEAN Link opens up new trading opportunities such as, direct access to trade on different ASEAN exchanges and acts as a local sponsor for inbound business from regional and global brokers, as well as for global buy-side.

• Finally, the migration of Bursa Malaysia in the 4th quarter 2010 to CME’s Globex platform, which will open up the global markets to the local participants.

As these advancements were outlined, alongside other perspectives from the Sell-side players, Face2Face’s Buy-side delegates gained greater insight into market development. This was highlighted when a number of Buy-side members of the audience expressed their industry perspectives and hopes for the future.

With the exchange helping to lead the way in the implementation of strategies, technologies and infrastructure, which will enable the Malaysian market to grow, the question turned to the current impediments in the domestic market, in comparison to the international markets. The cost of trading, lack of understanding around the benefits of electronic trading, legacy policies and regulation were highlighted as key. Azura Azman, Head of Equity Broking Division at RHB Investment Bank and Lim Jong Hau, Head of Equity Derivatives Group at CIMB Investment Bank, agreed that increased understanding of DMA and the deployment of algos to reduce latency and enhance institutional anonymity is starting to address these issues, supported by a healthy relationship with the regulator, who is fully engaged with market participants and is open to addressing the requirements of the market.

Attendee's Testimonials:

"The event was a great success, well attended, well organized and well worth our commitment." - Perry Pritchard, Managing Director, Head of Electronic Trading Sales, Daiwa Capital

"It was a successful event!" - Richard Zhu, Executive Vice President, Sungard Global Trading