Dr. Anshuman Jaswal
December 2011
Executive Summary
The market structure in the leading global markets is changing quickly, and fragmentation is on the rise. Hong Kong has seen a rise in the number of alternative trading systems, which are becoming increasingly important for market participants, especially the buy side.
Market data volumes and sources are increasing. In the last few years, there has been a sharp rise in the data volumes that have to be dealt with by trading firms. This rise has a direct bearing on aspects such as testing, trading, risk management, compliance, and market surveillance.
Complex event processing (CEP) has become a means of handling the rapid evolution in the financial markets. Importantly, it is not only a means of coping with change, but also generating higher returns, because it enhances a firm’s competitiveness and efficiency.
Hong Kong is widely accepted as a leading global financial centre, playing a central role in the Asian market. However, for the market participants in this region to compete with their global counterparts on an even keel, it is important that they move from data processing in a batch mode to real time processing. CEP can be instrumental in making this change to event-driven architectures, and firms in Hong Kong need to be cognizant of this.
Due to the current market environment and regulatory requirements, real time risk management and compliance have become crucial. Similarly, from the trading platform and regulatory point of view, market surveillance also has to be much quicker because trading technology and latency have improved drastically. Choosing the right CEP platform is important. Firms have to decide on the main features while selecting a CEP platform. These should ideally include flexibility, scope for customization, scalability, integration with existing platforms, and the ability to handle vast and complex data sets in real time.
