UBS is set to announce today that it is launching an internal electronic crossing platform for matching equity orders in Hong Kong. Named the UBS Price Improvement Network (UBS PIN), this platform will offer access to a single bank's so-called dark pool of liquidity in Hong Kong. Similar platforms are already well established in Europe and the US and have been operating across Asia Pacific for several years too.
The idea is that UBS PIN will improve liquidity for the Swiss bank's customers by enabling them to anonymously match orders with counterparties within UBS's internal liquidity pool. Cost savings for both buyers and sellers are achieved by splitting the bid-ask spread down the middle. Confidentiality ensures that orders routed via the platform will not adversely affect the market price.
UBS PIN will automatically be available each time UBS clients enter an equities order for Hong Kong securities through the firm, and no new technological connections or relationship agreements are necessary. David Rabinowitz, head of direct execution for Asian equities, told FinanceAsia that he expects all of UBS's electronic business eventually to go through UBS PIN.
He also said that alliances are likely to form with other brokers and banks in Hong Kong, which should prevent some of the fragmentation experienced in the US and Europe, where over 40 venues currently offer some semblance of dark pool interaction.
UBS claims to be the leading provider of liquidity in the Hong Kong market for the past two years, and had a market share of 6.76% in the first quarter of this year.
"As the leading provider of liquidity in Hong Kong, our deep and diverse trading flows from institutional and retail investors provide our clients with unique and tangible benefits, UBS PIN allows all of our clients seamless crossing opportunities with UBS -- which leads to spread savings and reduced signalling risk," said Laurent Combalot, head of equity client trading and execution for Asian equities, in a statement.
In addition to UBS PIN, the bank's global institutional electronic trading business, Direct Execution, offers direct market access, which is a suite of advanced algorithmic trading strategies, including an intuitive analytics platform via UBS Fusion and execution management systems called UBS Sapphire and UBS Pinpoint.