HSBC Links to More Exchanges

LONDON—The London-based bank HSBC is expanding its connections to exchanges, officials tell DWT.

HSBC announced this month it was expanding its membership of the Nordic Exchange to include the Copenhagen Stock Exchange and the Helsinki Stock Exchange. The bank had previously been a member of the Stockholm Stock Exchange. HSBC is also working on a deal with other exchanges in Poland and three other emerging markets.

"We [currently] have direct membership to 58 equity exchanges and 28 derivative exchanges around the globe," says Kevin Bourne, global head of execution trading at HSBC.

"We are using Fidessa to connect to almost all equity exchanges," Bourne says. "We prefer to use an identical platform for all our operations so that our IT teams do not have to deal with different local platforms and technology all over the place. It's a much more efficient way to operate," he says.

HSBC is using "all of our gateways for the European equity markets," representing 17 exchanges, says Phil Slavin, head of European product strategy for Royalblue's Fidessa offerings. In fact, HSBC has just finished phase two of its Fidessa rollout. "They upgraded their systems with version 5.0 for all our products," says Simon Barnby, marketing director for Fidessa.

For the derivative exchanges, HSBC is using Nyfix's Order Book Management System (OBMS), as well as software from GL Trade. Officials at Nyfix and GL Trade confirm they are working with HSBC.

"We are currently looking to add several exchanges, one of them being the Polish exchange, and three other in emerging markets," Bourne says. The connections with those markets are still under negotiation and development. These exchanges do not have direct market access capabilities at the moment, according to HSBC. "The technology on our end works—it's just a matter of how the exchange technology works," Bourne says.

Officials at Fidessa confirm that they are working with HSBC to provide access to these emerging markets.

HSBC has already connected itself with new markets such as the DIFX in Dubai to trade equities. "It's a very important market for us in the region. Dubai is the first major exchange in the region with a globalized architecture set-up," Bourne says. HSBC is expecting to grow its business with the Dubai exchange during the year.

"All of these memberships are paying dividends because we have our own dealing teams in those countries. We localized our operations," Bourne says.

Bourne cites the example of Turkey, one emerging market where HSBC set up a local trading team. "In Turkey, our local dealers see how they are part of a big trading machine," Bourne says.

HSBC has also started trading directly on the Oslo Stock Exchange, the Oslo Børs, as of Feb. 13.