Asian bourses ‘lead world’ on data distribution speed
Bourses in China, Korea and Taiwan are proving themselves global leaders in formatting company filings and getting them out quickly to investors, says Wendy De Cruz, vice-president for corporate and financial markets at information provider Dow Jones.
“It’s impressive what these stock exchanges have been doing,” she adds. “Some Asian exchanges are being really pioneering in terms of processing company filings.”
The Shanghai, Shenzhen, Korea and Taiwan stock exchanges put their corporate filings in “digestible” XBRL (eXtensible Business Reporting Language) format, says De Cruz. The US, for example, was slower to mandate an XBRL filing scheme for listed companies.
This is despite the fact that investors in the West tend to be more demanding in terms of the quality and transparency of information they want, notes De Cruz. “Yes, you get the transparency [in Europe and the US]," she adds, "but it’s a question of how quickly the data is formatted and transmitted to the customer.”
What it comes down to is the fact that there are so many legacy systems on the older European and US exchanges, meaning there is a more complex integration process involved in delivering information, says De Cruz. Also, it is an extensive exercise to facilitate this change, as it means costly infrastructure investments both for listed companies and exchanges.
The Chinese, Korean and Taiwanese bourses have little such history and have advanced technology, she adds, and this has been the case for at least two to three years.
De Cruz admits that one reason these exchanges focus on improving their secondary product offering may be because they are unlikely to attract the same level of IPO business as, say, Hong Kong, London or New York.
Meanwhile, in other areas, Singapore “has been fighting hard to keep itself as a financial-services friendly hub” compared with certain other exchanges in the region, she says. SGX is taking steps to cut trading costs, extend trading hours, make it less costly to list and to enhance the service it provides to listed companies, such as investor relations.
Dow Jones also has its own plans to help the Asian trading market develop. The company provides low-latency, machine-readable news for electronic trading and established a co-location centre in Hong Kong a year ago, because it has seen high demand there from hedge funds for this facility. “We wanted to target the buy-side before the sell-side,” she says.
If the company was to consider a future co-location centre in Asia, adds De Cruz, a possible market might be Japan, with its huge pension and insurance industry.