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Hong Kong Equities Added to Instinet’s CBX Asia

Instinet has announced the addition of Hong Kong equities to its CBX Asia displayed liquidity platform. The CBX Asia platform, which has allowed Japanese equities trading since 2001, will offer trading in all Hong Kong stocks.

“More and more traders in Asia are turning to crossing networks and alternative liquidity pools for the execution quality benefits they bring through their anonymity and advanced order functionality,” says Nick McDonald, co-head of Asian Equities at Instinet. “That being the case, and the fact that Hong Kong is Instinet’s second largest market in Asia, our clients have expressed interest in extending CBX ASIA to Hong Kong and other Asian markets, which we are currently working on.”

Clients can access CBX Asia via Instinet’s Newport execution management system (EMS) and Asia SmartRouter, directly through FIX or third party OMS/EMS platforms.

McDonald adds that CBX Asia is available to buy and sell-side traders, but that historically North American and European firms trading into Asia have been the biggest users of similar ATS platforms. “But we’re increasingly seeing Asian-based funds using the platform,” he notes.

The use of ATS’ is becoming more mainstream in the Asian markets, says McDonald. “As was the case with DMA, algorithms and smart order routing, widespread adoption in Asia was slightly behind the rate of adoption in the U.S. and Europe,” he explains.

“However, given that unbundling has really begun to take hold in Asia and the fact that off-exchange ATS platforms consistently provide superior execution results when compared to the primary exchange, we believe ATS’ in Asia will continue to increase despite the rough market conditions,” McDonald says.

He adds that as with the rest of the global economy, the Asian markets have slowed recently but he still sees opportunities for ATS platforms that offer price improvement for clients.

McDonald says there are a few other Asian markets that clients have expressed interest in trading off-exchange through the CBX Asia platform. “We hope to begin rolling them out during the first half of 2009,” he says.

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