Asia Pacific's family offices are a nimble bunch and never more so than when it comes to ESG where they're already proving to be ahead of the regulators.
Both had been working elsewhere in ITG businesses. Butler was formerly senior vice president of algorithmic trading in the US. Corcoran moves to Sydney from the Hong Kong office where he was formerly head of business development.
These reshuffles, together with a 40% increase in regional headcount this year, have been made to support ITGÆs Asia Pacific business, in tandem with the rollout of its Posit crossing engine in Australia in late spring 2007, which was believed to be the first continuous crossing dark pool to set up in Australia, though since has been joined by others.
The Posit dark pool is used by hedge funds and long-only funds to cross large blocks of stock that might, if brokered in the normal way, cause market movement as the order is worked. ITG analysed US fund managers and found that commission cost and brokersÆ fees averaged nine basis points, while market impact costs (which means the cost incurred by the market moving away from the original price), averaged 14 basis points. In addition, opportunity or delay costs (meaning the cost incurred from a delay in executing the trade from the point of decision making) accounted for a further 23 basis points.
The roughly 40 dark pools in America account for just under 10% of US stock trading. So far there exist just a handful in Asia, including ITGÆs Posit, Credit SuisseÆs Crossfinder and Instinet, but other firms look set to enter the market. Since its launch in March 2007, over twenty domestic Australian funds managers have signed up for Posit in Australia.
ôIt is designed to minimise information leakage so that other traders canÆt front-run you,ö says Gabe Butler in Hong Kong. ôFor large block trading, a mechanism sweeps the trade blotters of participating funds managers, and flags trades that are in the order system. It alerts them when a buy or sell match is found for their available trades. All crosses are transacted through our crossing engine at the mid-point so there is no price negotiation. ItÆs also anonymous, and you never know who you are trading with.ö
ITG operates as a licensed broker-dealer in Australia, and after crosses takes please, all trades executed get reported on the exchange.
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