Post on 11-Jul-2020
INTRODUCTION TO CHI-X ASIA PACIFICSEPTEMBER 2019
2
Chi-X Asia Pacific Overview
Chi-X Japan• A leading Proprietary Trading System (PTS) in
Japan, provides members and investors with better trading opportunities at lower cost under highly transparent rules.
• Operates four equity trading venues to provide solutions to evolving needs of market participants.
Chi-Tech (Hong Kong & Philippines)• Provides the trading
technology platform and support services that keep the Chi-X market centers at the forefront of the industry in performance and reliability.
Chi-X Australia• The securities and derivatives exchange
transforming the Australian investment market through a focus on customers and innovation.
• Delivers easy, cost-effective access to local and global investments opportunities.
An Alternative Market Operator, Provider of Innovative Market Solutions in the world’s #2 and #3 equity markets.
3
“Chi-X” Brand and History
Instinet (USA)
• 1969 Instinet founded as a pioneer of electronic trading.
• 2002 Instinet merged ECN business with INET, which was retained by NASDAQ in 2005 after acquisition and sales.
• 2007 Instinet acquired by Nomura.
Chi-X Europe (Europe)
• Chi-X Europe was established in 2007 by Instinet. Rapid expansion of its market share made “Chi-X” a premier brand name in the global execution industry.
• After being managed as a consortium of major global financial institutions, Chi-X Europe was acquired by Bats Global Markets in 2011. Bats Chi-X Europe
remained to be the second largest equities market operator in each EU country. Bats Global Markets was acquired by CBOE in February 2017.
Chi-X Global (Canada, Japan, Australia)
• Chi-X Global, 100% ownership of Instinet, was established to provide alternative trading venues outside of Europe and USA.
• Launched Chi-X Canada February 2008, Chi-X Japan July 2010, Chi-X Australia October 2011.
• NASDAQ completed the acquisition of Chi-X Canada in February 2016.
Chi-X Asia Pacific Holdings (CXAPH)
• J.C. Flowers acquired Chi-X Global (excluding Canada) 100% in February 2016 and established CXAPH.
• Chi-X Japan - first and only broker-neutral equity PTS in Japan, operates 4 trading books.
• Chi-X Australia - second largest regulated exchange in Australia, offers trading in equities and listings for Warrants, ETFs, “TraCRs”.
• Chi-Tech (Hong Kong & Philippines) - technology service and development units supporting regulated market centers Japan and Australia.
The name Chi-X is derived from the Greek letter “χ” symbolizing the crossing of the two sides – new/old and sell/buy.
4
Timeline
1969 2007 2007 2008 2011 2016 20162008 2011
Instinet
Founded
Instinet Acquired by
Nomura; Chi-X
Global Founded
Chi-X Europe
Founded
Chi-X Canada
Founded
Chi-X Japan
Founded
Chi-X Australia
Founded
Chi-X Europe
Acquired by
Bats Global Markets
Chi-X Canada
Acquired by
NASDAQ
Chi-X Global
Acquired by J.C.
Flowers; Chi-X Asia
Pacific Founded
2010 2018
Chi-Tech (HK)
Founded
Chi-Tech (PH)
Founded
5
Chi-X Structure
Launched in 2010
One of two PTSs viewed as viable alternatives to the TSE
Currently ~2.0% market share
Operates 4 trading books including both lit and dark
Operates a continuous market along with VWAP cross market
Dedicated market operations team, strong local sales and product development teams with deep understanding of domestic broker community
Launched in 2011
An established Securities and Derivatives exchange
Regularly achieves over 20% of Australian market share and $1 billion a day in cash equities
Offers a full suite of services for exchange traded investment products and cash equities including; Trading, Reporting, Risk Management, Market Data, Connectivity
Investments products platform includes Warrants, Indices (CXA 200), TraCRs, or Transferable Custody Receipts (reverse ADRs) and ETFs/QMFs
Chi-X Global Technology (Hong Kong) launched in 2008, Chi-X Global Technology (Philippines) launched in 2018
Five core tech teams based in both the Philippines and Hong Kong
DevelopmentQuality AssuranceSupportService Desk Infrastructure
Builds and supports Chi-X Global proprietary technology solutions as well as custom exchange solutions to key third parties including CFETS
Chi-X Japan
7
Chi-X Japan Company Overview
PTS Trading ToSTNeTReportingContinuous Matching Periodic Matching
Chi-Alpha
Main PTS8:00-16:00
Chi-Select
Retail & DMM8:00-16:00
Chi-Match
TSE VWAP CrossingPre-Market Open
Kai-X
Broker NeutralDarkpool
9:00-15:00
Chi-X Japan operates 4 markets, and trades higher volumes and achieves better price
improvement with mid and small-cap equities.
8
Chi-X Japan Market Liquidity Trend (June 2019)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
0
10
20
30
40
50
60
70
JPY b
illion
Average Daily Execution Market Share - All Large Mid Small
Average PI (bps)
MarketShare
Large 0.5 0.7%
Mid 2.7 3.2%
Small 3.9 3.7%
T2/J/M 10.6 1.7%
ETF/REIT 5.4 1.5%
Overall 3.8 2.0%
Large
15%
Mid
51%
Small
23%
T2/J/M
5%
ETF/REIT
6%
Execution Value Breakdown
Market share: Chi-X’s 2 markets among lit markets (TSE, Chi-Alpha, Chi-Select, JNX-J, JNX-X)PI (Price Improvement): it compares the trade price vs. TSE's best bid for sell or best offer for buy at each point of trade and is calculated from the perspective of the Taker of the trade. The average calculation includes trades at TSE price.
Chi-X Australia
10
Chi-X Australia Company Overview
Trading
Cash Equities: ~20% Market Share
(Record Day 24.1% November 2017)
ETFs: ~35% Market Share
(Record Day 47% November 2017)
Warrants: ~15% Market Share
(Record Day 16.5% January 2018)
Market Data
Terminals
Data Feeds
Historical
Non-Display
Infrastructure
Market Connectivity
Trading Interfaces
Inter-site Data Centre Links
Listed Products
Warrants
Depository Receipts (TraCRS)
Exchange Traded Funds (ETFs) &
(QMFS)
Indices
Chi-X Australia is a fully licensed securities and derivatives exchange with a reputation for
focus on customers and innovation.
11
Chi-X Australia Update: Equities Trading
12
Chi-X Australia Investment Products
* Subject to regulatory approval
Warrants
TraCRs*
Indices
Funds**
Chi-X Global Technology
14
Chi-X Global Technology (Chi-Tech) Company Overview
Chi-Tech’s Value: Demonstrated reliability and expertise in trading technology, software development, market operations, support, and other advisory for its various exchanges.
• High-performance continuous matching system• Integration of SOR with wholesale equity market platforms• Architect of next generation of execution platform• Development of dark pool
15
Chi-X Global Technology (Chi-Tech) at a Glance
Hong Kong / Philippines
(32 & 39 staff, respectively)
Development Quality
AssuranceSupport Service Desk Infrastructure
Our Capabilities:• High Performance Real-time data distribution systems
• High Volume/High Availability/Low-Latency trading systems
• Big Data (Cloudera Hadoop)
• Artificial Intelligence using Machine Learning/Deep Learning
• Cloud Services
• Building and Support of Financial Trading Systems
Chi-Tech has successfully developed and licensed Market Data Systems and Data Enterprise/Integration platforms for
major exchanges like DBAG, Euronext and China Foreign Exchange Trading System (a subsidiary of the PBOC).
Our Languages:• C++, Java, Web, Python, Matlab, R
• DB – MySql, NoSQL, COUCH, Redis