A look back at Trade Tech China 2012

Written by Zennon Kapron || 14 May 2012

It has been a few weeks since Tradetech China and it’s worth taking a look back at the event itself. Really in China, there are not too many capital markets focused events and WBResearch saw the opportunity and in 2010 setup Tradetech China.

During the first year, although Kapronasia wasn’t in attendance, we had heard that event was quite vendor and sell-side heavy with little actual buy-side attendance. This year we did attend as in 2011 and actually this year had the opportunity to chair one of the tracks on the day two - it is pretty amazing how quickly the event has shifted. Gone are the problems of too many sell-side, now from our own view and my experience from similar events, there were almost too many buy-side and not enough sell-side, which for an event like this was pretty impressive – especially only three years in as buy-side are typically who the events want to attract.

The depth and breadth of the agenda was impressive as well. There were some great panels starting with the first session which covered: “Evaluating the latest technology upgrades that exchanges are introducing and determining what benefits they will bring to both domestic and international participants.” The panel consisted of six heads of IT from the major Chinese exchanges and topics ranged from basic infrastructure to co-location.

Clearly the same issues that have challenged financial technology are still there. For our session, we identified 5 main trends that we have been seeing in the market which included:

  1. Capital Markets IT Infrastructure refresh
  2. High Frequency / Low Latency Trading
  3. Risk Management / Information Security
  4. Algo Trading
  5. Disaster Recovery 

We had actually talked about these the week before the event internally and looked at some of the key market trends that we had been seeing. During the event, we kept an open mind as to new ideas, but it became clear that these topics were still top of mind for many of the attendees and decision makers; and I wouldn’t say that these issues are much different than those in the US, perhaps a year or two behind the US, but nearly the same conversations.

The other thing to keep in mind is the regulatory situation. We’ve talked about this in the past, but China’s capital markets are coming from a very regulated market to a less-regulated market, whereas the US is going from a somewhat unregulated market to a more regulated one. So a lot of the challenges that the US market faces are largely around regulatory issues, whereas China is still a bit more basic infrastructure (e.g. risk, disaster recovery) and functional (e.g. better algo trading solutions, low latency).

What had changed was the complexity of the conversation. One panel on the second day was a perfect example. The topic was “Unlocking the value of quantitative analysis when trading Chinese stocks and futures” and the one moderator and five panellists were a combination of Quant Trading/Investing Directors, a Chief Investment Officer from a local fund and a Director of Financial Engineering from another. All had at least a Doctorate and most had actual wall street experience. The level of talent that the Chinese institutions are hiring is pretty amazing – a few years ago, getting a panel like that together in one place would have been impossible as firms just didn’t hire that level of staff. Clearly a sign that firms are getting more sophisticated.

All in all, the event was excellent. Some great discussions and comments from the top financial institutions in the market as well as some of the top providers. We also had the pleasure of wrapping up the event with the closing session as well as the final closing comments. A copy of our closing slides is available to all in the Research Reports section of the Kapronasia website. You will need to register for free if you haven’t already to download.

Should you have any questions about the topics of which we spoke, please do not hesitate to contact me directly or email This email address is being protected from spambots. You need JavaScript enabled to view it. with your questions and comments.

Zennon Kapron

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