Tuckwell is responsible for integrating Deutsche BankÆs computer-based trading and DMA businesses in Asia onto a single platform. He is based in Hong Kong and reports to Denis MacCarthy, head of equity sales for Asia ex-Japan. He joins from Dresdner Kleinwort in London where he was head of global portfolio trading, DMA and algorithmic trading, the same role he holds now at Deutsche Bank.
ôProgramme trading is becoming more electronic in orientation and direct market access or algorithmic trading as a function is more and more a client requirement in Asia û for clients based in Asia and offshore clients executing into Asia,ö MacCarthy says. ôIt is a business that is growing exponentially, especially for domestic Asian clients.ö
Programme trading, which refers to computer-based or algorithmic trading, is typically associated with large movements of buy or sell orders by institutional investors. DMA allows institutional investors to place buy and sell orders directly with other market participants via an exchange, rather than going through an individual broker. Algorithmic trading aims to increase efficiencies by using various mathematical formulae to decide timing, price and quantity of a particular trade.
TuckwellÆs role is two-fold. The first is to evaluate the opportunities for programme trading and the electronic business for domestic clients in Asia and also to ensure that global clients who wish to have electronic trading activities here will have that in place. The second covers the development and the deployment of new electronic tools for Deutsche BankÆs clients in Asia. He is working to deploy liquidity pools and algorithmic technologies and working with new clients domestically to develop trading tools that are sufficient for their global needs.
Tuckwell brings to Deutsche Bank his many years of experience in the electronic trading execution space. Before Dresdner Kleinwort, Tuckwell was head of European portfolio trading at Merrill Lynch in London. Before that, he was head of Asia-Pacific portfolio trading and head of equity derivatives trading at Merrill Lynch in Hong Kong.
Prior to TuckwellÆs appointment, programme trading, DMA, and algorithmic trading sales were handled by three separate teams at Deutsche Bank under their own respective leadership. The integration allows those clients that combine their programme trading and DMA requirements to more efficiently meet their needs via a single platform, while bringing Deutsche BankÆs second-generation algorithms to a broader client base across Asia.
Deregulation has increased the number of markets that DMA is now allowed and Deutsche Bank expects this trend to continue.
Indeed, stock exchanges in Asia have been upgrading their trading execution capabilities to meet the growing needs of investors coming into the region and those who are already here. Algorithmic and high-velocity traders who have been very active in the US and Europe are increasingly looking to get more involved in the Asian markets. To make the move to this region, most require high-speed and low-latency access for their infrastructure engines.
ôMore and more markets are being adopted, from a clientÆs perspective, in terms of what they are willing and want to trade,ö MacCarthy says.
MacCarthy notes that Hong Kong has been a primary DMA market for many years, as has Korea and Taiwan and Singapore to a lesser extent. India is a market that has been receiving increasing attention from clients, he says, and there are also requests coming through for onshore participation in China.
ôHopefully we will continue to see regulatory developmentsö that will make programme trading, DMA, and algorithmic trading possible in more markets in Asia, he says.
There are two key growth markets for programme trading, DMA, and algorithmic trading. First is in trading execution into Asia from investors inside and outside the region. Second is growth from the rising number of local clients from places such as Hong Kong, Korea or Taiwan who want to execute offshore into the US, Europe, Japan or Australia. Deutsche Bank believes the latter shows the biggest growth potential over the longer-term.
The growth in this electronic trading execution space has been due to a convergence of a number of factors.
ôYou have a situation where a large amount of clients in this region wish to diversify their assets away from bonds into equities offshore and often they wish to use DMA to do so. That has to do with regulatory approval onshore,ö MacCarthy says. ôThe adoption of new technology has also been key.ö
Deutsche Bank says it is well set up to handle this type of activity with its global Autobahn product enabling clients to trade cross products and across regions around the world.