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And the best Asian City to HQ your etrading is …

I'm pleased to welcome this guest blog entry by Steve Edge of AsiaEtrading.com.

Singapore
is the best city in Asia to headquarter an electronic trading business
according to a two week opinion poll conducted at the AsiaEtrading.com
website.

The result is no
surprise as Singapore has a low corporate tax rate of 18% (17% in 2010), a high
standard of living, a great quality of life and wonderful weather all
year-round, which is why the island at the apex of the Straits of Malacca won the day
amongst pollers.

Drilling down, the electronic trading environment the local
Government and Monetary Authority of Singapore (MAS) oversee is the
envy of the zone especially to Hong Kong, its regional rival, which
came second in the poll. The Singapore Exchange (SGX) pioneered cross
border futures trading in Asia offering complimentary contracts in
Japan, Taiwan and Hong Kong. The Osaka Securities Exchange (OSE) was
forced to offer futures trading in the Nikkei 225 one year after the
SGX rolled it out in Singapore.

Singapore is leading the way in the dark pool space as well. A join
venture announced last November with Chi-X to form Chi-East is Asia’s
first exchange sponsored dark pool. Granted the Singapore pension
market isn’t that large and there is a perception that this kind of
offering with fragment liquidity but it is widely acknowledged that
institutional investors need a place for “upstairs” trading with out
signaling or moving the market and a dark pook is just the place.

Let’s not forget the commodities hub that Singapore is pushing to
be. The SGX has a subsidiary called SICOM (Singapore Commodities
Exchange) of which the MAS has allowed a competing commodities exchange
to operate directly against it; the Singapore Mercantile Exchange
(SMX). Singapore is even the third largest oil trading market in the
world.

Fortis and Barclays are headquartered there. Eurex has established
an access point of which Transmarket Group was its first client back in
2006. Trading vendors such as Trading Technologies, RTS and FlexTrade
call Singapore home as well. Equities, futures, commodities, clearing,
world class firms, low taxes and nice weather certainly make Singapore
an electronic trading Mecca in Asia.

Here are the results of the poll
1) Singapore – 38.1%
2) Hong Kong – 29.8%
3) Mumbai – 15.4%
4) Tokyo – 9.0%
5) Shanghai – 7.7%

There was some consternation about the cities chosen in the poll and
perhaps the result might be different if it included Sydney, Seoul or
Taipei but I doubt it. Hong Kong is the gateway to China but its
complacent retail-centric approach to trading is leaving it behind its
regional rival. Mumbai is still growing up and will certainly be one to
watch in the coming years. It has always been a commodities hub
especially when the US declared independence from England and the
ensuing war cut off cotton and forced the British to buy from India.
Japan is the largest equities market in Asia but is now only coming
around to industrial strength trading. Shanghai has a long way to go as
well with respect to trading savvy and regulatory openness.


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Hard to beat Singapore and Hong Kong..impressed to see Mumbai moving up the list.