In today’s increasingly interconnected world, it’s easy to assume that one-size-fits-all when it comes to financial infrastructure. This couldn’t be further from the truth. Regional nuances play a crucial role in shaping the framework of global business, especially one where multi-asset trading desks across the world constantly interact.
A consequence of the lack of regional nuance has been the emergence of trading blind spots in specific markets at certain times. In 2023, you would expect consistent market access across asset classes and global markets – sadly, this is not always the case. The Australian market is a prime example – contending with daily restarts in derivatives markets around the open. For those managing global multi-asset trading operations, this is a problem as any downtime causes disruption, leading to missed opportunities and lengthy processes.
Theoretically, derivatives markets should be accessible 24 hours a day, unbound by the time constraints that govern other asset classes. These restarts are rooted in the technical capabilities of legacy order and execution management systems, not the underlying market structure. The problem and solution to these outages lie in the underlying technology.
The Australian Experience
Each day, legacy global trading systems are reset at around 9am in Sydney as Australian markets wake up and as US traders give the final push to market close. Although seemingly minor, this process causes significant disruption to daily workflows. Besides forcing a temporary halt to all transactions, these resets compromise the efficiency of the Australian financial markets, sending ripples through the financial ecosystem and creating headaches for global trading operations.
The global synchronization of markets has always posed a challenge due to time-zone differences but has been exacerbated by cumbersome technology. For traders, it means that multi-asset trading systems can be difficult to manage, particularly when there is downtime in futures as US equities markets close. Addressing this avoidable blind spot is essential to creating an efficient global trading ecosystem.
This problem is not one of technology but rather of design. Systems must be architected in a way that accounts for the individual characteristics and nuances of each region they serve. However, global legacy trading systems are not designed to serve all four corners of the world. Investment firms in Australia therefore need to take action and choose technology purpose-built to serve global markets.
Enter global trading technology providers, such as TS Imagine, at the forefront of creating global-first solutions underpinned by local expertise – understanding the behaviors, regulations and quirks that make each region unique. These electronic trading systems work harmoniously on a global scale to eliminate the disruptions that have long plagued the Australian derivatives market. Taking unique trading cycles, time zone differences and local regulations in their stride.
Addressing the Australian case and others like it requires more than simply adjusting system architecture. It demands a rethink of how we view and treat different financial markets worldwide. Companies like TS Imagine are leading the way in this regard, demonstrating that with the right mindset, it’s possible to create systems that respect regional nuances while delivering high-quality, globally viable solutions.
The Australian experience in the derivatives market is a powerful lesson in the importance of accounting for regional nuances in system architecture. This example is a call to action for technology providers and market participants, a reminder that in a globalized world, respect for regional differences isn’t just good practice — it’s a business imperative. We must ensure that our technological solutions are as diverse and globally aware as the markets they serve.