The Sydney Futures Exchange (SFE) is expanding access to its electronic trading platform overseas to provide greater liquidity and improve the market's efficiency. The SFE has opened up two new communications hubs in Hong Kong and in Tokyo. The hubs provide SFE member firms and their approved affiliates with a direct link into the SFE market via SYCOM (Sydney Computerized Market) electronic trading screens.
The establishment of more communications hubs is part of the SFE's plans to become operational around the world and around the clock and is a way for Australia to tap into greater liquidity, says a source close to the exchange. Whereas previously member firms would have to phone their offices in Sydney or the exchange itself to place trades, the firms can now directly access SFE products through a connection to the hubs.
The exchange, which went fully electronic in November, can distribute its products in a more streamlined manner to international customers through the electronic platform, explains the source. The hubs also are a way for the SFE to overcome the barriers of time zones and remote location. While it's too early to tell how electronic trading through the international hubs will affect SFE volumes, the source expects overall volumes to increase in time through the hubs.
The SFE has also been granted approval by the Commodity Futures Trading Commission to establish foreign trading terminals in the U.S. and plans to launch hubs in New York and Chicago by the end of the first quarter of 2000. The U.S. hubs are an important addition because they will open up the SFE to member firms in the largest market for derivatives, says the source, adding that other expansion plans may include a hub in continental Europe. Over the summer, the SFE also opened a hub in London, where seven member firms have SYCOM screens connected. Hubs in Wellington and Auckland, New Zealand have also been established.