The ability to deliver liquidity, access and technology-driven solutions will be key.
San Francisco – 08 March 2010 – An independent report from Aite Group examines the overall capabilities of Tokyo Stock Exchange’s arrowhead, and its potential impact on the evolution of the competitive landscape in the Japanese equity markets. The study, commissioned by Tora Holdings, Asia’s leading provider of advanced trading technology and financial services, highlights the need to utilize brokers with a strong commitment to investing in the latest technology infrastructure in order to capture the benefits offered by arrowhead. “Launch of arrowhead: The Need for a Next-Gen Broker in Japan” is available for download at http://www.stage.toratrading.tw/aite-arrowhead.html
For this report, Aite Group conducted interviews with some of the most active buy-side investors and largest sell-side firms in Japan. They also spoke at length with the Tokyo Stock Exchange directly. Key changes to daily trading will be the following:
- Arrowhead provides significantly lower latency, reducing order acknowledgements from several seconds to under 10 milliseconds.
- For the first time, the TSE’s trading participants will be offered co-location (proximity) access. In turn, brokers can then provision access to their trading clients.
- Distribution of market data will be vastly improved with the availability of deeper market depth.
- Implementation of rule changes including reduction in tick size, modifications to daily price limits and introduction of sequential trade quote.
The short term impact of these changes will be most important to high frequency traders. Long term, the importance of advanced trading infrastructure will increase as more sophisticated trading methods become more prevalent.
“With the launch of arrowhead, the TSE is revolutionizing Japan’s equities market, bringing it fully into the digital age,” says Sang Lee, managing partner with Aite Group. “Buy-side participants hoping to succeed in this new trading environment cannot afford to rely on traditional brokerage services. Fortunately, a new generation of brokerages, like Tora, can deliver the liquidity, connectivity and sophisticated electronic services that are needed.”
“Tora’s focus has always been on delivering unique technology-driven trading and liquidity solutions,” said Robert Dykes, CEO of Tora. “Aite’s findings confirm that the trading landscape in Japan will evolve rapidly in the coming years and participants will be best served working with partners such as Tora that are creating differentiated technology driven financial services.”
About Tora Holdings
Tora is Asia’s leading provider of advanced trading technology and financial services. Tora’s unrivalled solutions span the entire trading process, offering a full suite of trade execution capabilities in markets across Asia, North America and Europe. Tora’s high-performance EMS/OMS has been designed from the ground up by traders, and is currently used by traders at hedge funds, long-only funds and sell-side proprietary trading desks. Tora also provides clients with access to its unique liquidity pools including Asia’s leading non-displayed matching engine. Tora’s dedicated Asia trading desk delivers to buy-side clients unmatched Asia expertise and extensive analytics focused on best execution. Tora’s extensive suite of proprietary algorithms (trading and strategy-focused) is fully customizable and broker neutral. Tora has over 175 employees dedicated to Asia, with offices in Tokyo, Hong Kong, Singapore, New York, Los Angeles and San Francisco. Additional information is available at www.stage.toratrading.tw.
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