This post first appeared on FloatingPath
SGX’s executive vice-president for sales and clients, Chew Sutat recently told The Business Times in Singapore that the exchange is open to paying liquidity provision rebates to high frequency market makers willing to trade on their exchange.
“We are interested to see how we can support liquidity and market-making in our securities markets as market makers and liquidity providers provide a service to the market. Clearly for that service and the cost and risk that they are taking in providing two-way quotes, they will need to be compensated through appropriate schemes, including potentially liquidity rebates as an example.”
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This news comes just days after the exchange’s CEO Magnus Bocker, rolled out a public plan to bring HFT to Singapore. SGX is currently in the process of installing circuit breakers and has just completed a $250 million upgrade in technology speeding trade processing up to 90 microseconds.
Despite consistent trading glitches in HFT-dominated U.S. markets and impending regulation in Europe, Southeast Asia’s largest bourse believes bringing the high speed algorithms to their market is the only way to boost trading volumes and liquidity. It’s worth noting that outside of Japan and Australia, HFT strategies are largely unpopular in Asian markets.