Automated Trading Comes to Japan

Terry Flanagan

Interactive Data Corporation, a provider of managed ultra-low latency IT and market data feed services designed to facilitate electronic trading, has announced the availability of additional Japanese content via its Consolidated Feed.

Demand from firms in Asia, Europe and the U.S. continues to grow for increased access to the Japanese Proprietary Trading Systems (PTS), alongside the traditional exchanges in the region. To respond to this demand, Interactive Data has added content from two of the leading PTSs, SBI Japannext and Chi-X Japan, to its Consolidated Feed.

“We continue to expand our real-time market data, hosting and connectivity capabilities, enabling us to deliver a range of low-latency, co-location and related trading infrastructure services,” said Emmanuel Doe, president, trading solutions group at Interactive Data. “We have added content from two of the largest PTSs to our Consolidated Feed, offering a compelling one-stop shop for trading firms who require data, hosting and connectivity to a significant and globally important financial market.”

This latest content enhancement augments Interactive Data’s expansion in Asia Pacific that includes full 7ticks hosting capabilities in Tokyo and ticker plants in Hong Kong, offering access to high quality content and ultra-low latency connectivity for the region.

PTSs in Japan scored a major coup in 2012, receiving an exemption from the country’s regulator, the Financial Services Agency, from the takeover bid (TOB) rule.

The TOB rule requires investors who approach a five per cent stake in a company’s outstanding shares to launch a tender offer if they are trading off-exchange, causing many participants to have concerns for inadvertently breaching the rule when trading on a proprietary trading system (PTS), as alternative trading venues are known in Japan.

The Tokyo-Osaka merger provided the impetus for regulators to increase competition. By exempting Japan’s two PTSs—Chi-X Japan and SBI Japannext—from the TOB rule, the FSA is supporting market fragmentation and more foreign order flow to be directed into the PTSs.

Separately, Redline Trading Solutions has announced support for Japanese equity markets operated by the Tokyo Stock Exchange Group (TSE, Fukuoka, Nagoya, Sapporo), SBI Japannext (Day, DayX and Night), and Chi-X Japan in the Redline InRush 3 Ticker Plant.

“The Japanese equity markets have a clear need for state-of-the-art market data delivery, given increased volumes and volatility, the rise of competitive trading venues, and upcoming decimalization by TSE,” said Mark Skalabrin, CEO of Redline Trading Solutions. “The improved pricing accuracy and order tracking insights that result from our ultra-low latency technology will enable higher fill rates and profits for automated trading strategies in Japan.”

InRush is a ticker plant for North American banks and trading firms, delivering ultra-low latency market data to trading and order routing applications. InRush may be deployed in the same server running the client trading applications, as a distribution hub to cross-connected subscribers, or as a Redline managed service. Redline has established market data connectivity and co-location presence in Tokyo to support customer deployments in Japan.

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