Bursa Malaysia Berhad has announced plans to introduce direct market access to enable real-time execution of trade orders. The technology will effectively reduce the latency of trading order executions from the current system’s five seconds per transaction to a matter of milliseconds.
Direct market access (DMA) will be implemented in two phases. The first phase will involve the deployment of the derivatives DMA, which is targeted for completion towards the end of 2007. The second phase will encompass equities and derivatives on a single DMA trading platform and will be implemented following the launch of equities platform Bursa Trade in early 2008.
DMA will be implemented on the back of Bursa Trade – the exchange’s integrated trading system for derivatives and equities that is currently in its second phase of deployment.
The derivatives portion of Bursa Trade was implemented in November 2006, replacing the former derivatives trading platform (KATS) which had a technical capacity of 10 transactions per second. Bursa Trade Derivatives has been tested to a capacity of more than 1,000 transactions per second.
The equities portion of Bursa Trade is expected to be completed by early 2008.
DMA is already well-established in some of the world’s more developed markets like the US, Europe and Australia. Globally, investor preferences are increasingly aligned to more efficient markets where trades are fully electronic and offer investors more control over their trade executions, commented Bursa Malaysia’s CEO, Dato’ Yusli Mohamed Yusoff.
DMA changes the trading landscape of the Malaysian capital market. With it, investors will enjoy immediate execution of trade orders at a faster speed. By automating the trade order process, DMA provides investors greater control over trading execution and strategies, he continued.