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Enoch Yiu

Hong Kong Exchanges and Clearing will soon launch remote access trading, allowing overseas investors and foreign brokers to trade Hong Kong derivative products directly.

HKEx chief operating officer Frederick Grede said remote access trading was an important step for HKEx in attracting more international investors and would enhance the exchange's competitiveness.

As a step to preparing for its launch, HKEx yesterday said it had signed a deal with Radianz to use its global financial extranet to connect foreign investors' computers to Hong Kong's futures trading system.

Connection to the Hong Kong Automated Trading System (HKATS) will allow financial professionals, including brokers, bankers and other institutional investors, to trade in all Hong Kong derivatives products.

Radianz provides services to 3,000 financial companies, allowing them to connect their computers to various trading platforms or information hubs.

HKEx recently signed a similar agreement with GL Trade (Asia), a French-listed company that provides electronic trading platforms.

The agreement will allow HKEx's 5,000 clients to connect to HKATS should they wish to do so.

Mr Grede said the arrangements with Radianz and GL Trade (Asia) formed an important step for connecting overseas investors to the exchange's network.

'These agreements are part of our continuing efforts to expand the distribution of our derivatives market products and build market liquidity,' Mr Grede said.

Under present arrangements, overseas investors must open accounts with a Hong Kong brokerage and give their orders by telephone.

The brokerage staff then execute the trades manually on the HKATS system. However, this is inconvenient and slow, and could lead to human error.

Mr Grede said more than 15 overseas firms, clients of either Radianz or GL Trade (Asia), had shown interest in connecting to HKATS.

He said that, once these investors had agreed to connect to HKATS, the exchange would formally introduce the remote access services, which he believed would happen soon.

Andrew Bond-Webster, Radianz's Asia-Pacific-Australasia vice-president, said its deal with HKEx would increase the number of exchanges using its Internet services.

'The agreement will further strengthen Radianz's position in Hong Kong and worldwide, because it will enable us to offer financial professionals access to another key exchange,' he said.

Mr Grede said Hong Kong needed to introduce remote trading for future expansion.

He cited the example of Frankfurt-based Eurex, the largest futures exchange in the world, where 25 per cent of its United States investors traded through remote access.

'We want to ensure Hong Kong Exchanges and Clearing becomes an international futures market,' Mr Grede said.

'We need to have more international investors trading in our market.

'Hong Kong only has 6.8 million people. We need more international investors to trade in our futures market to help it expand,' he said.



Deal with Radianz opens doors to derivatives