UBS said this morning that it has launched its advanced algorithmic trading platform, called Tap, in Asia-Pacific. The platform is part of its global automated dealing service, providing investors with access to "dark pools of liquidity", and will be available for clients dealing in Hong Kong and Australian equities. The Swiss bank also intends to introduce the facility in Tokyo.
"We've been monitoring Tap in the US and Europe for the past nine months and also analysing market data on the exchanges in Australia, Hong Kong and Japan, and concluded that Tap would be a valuable service for our clients in the region. We set up a pilot scheme in Hong Kong and Sydney a couple of months ago; we will also soon launch the service in Japan," David Rabinowitz, head of direct execution for Asian equities, told FinanceAsia.
Tap is an automated trading strategy that seeks out multiple sources of liquidity in the market, while offering traders a range of "urgency options" that control how fast an order fills and how much of the order will interact with displayed markets and non-displayed liquidity.
The process, in effect, automates and makes more efficient an order system which until now has normally been conducted manually and on the phone.
UBS Tap was originally launched in the US in response to client requests for a liquidity-seeking strategy that used advanced logic to access multiple trading venues efficiently and quietly. Built specifically for Asia-Pacific's unique markets, the regional launch of Tap provides UBS clients who trade in Australia, Hong Kong and (eventually) Japan with access to better execution, via the UBS Price Improvement Network (UBS PIN).
"Tap allows our global clients to optimise their transaction strategy, prioritising liquidity, price or the urgency of dealing. The key is that investors will be able to transact their trades in such a way that they should achieve the best price without moving the market against them," added Rabinowitz.
"Tap is the most agile algorithm yet and provides traders with ultimate control. It is designed for traders who wish to minimise their potential market impact on their order but, at the same time, reduce the risks of opportunity cost," Yang Xia, managing director and head of algorithmic trading for UBS in Asia-Pacific, said in a statement released yesterday.
In addition, "TapNow", which is an aggressive variant of Tap, will be available. It seeks liquidity when speed of execution is critical, and is designed to access displayed and non-displayed market liquidity-sources simultaneously to optimise crossing opportunities while, at the same time, targeting urgent order completion.
However, at present, all transactions have to be crossed over the Asian exchanges, and there are few alternative external, third-party liquidity providers. "But, dealers and investors will be able to access our internal pools, and we will be perfectly set to extend the service when the rules become more supportive," said Rabinowitz.
UBS Direct Execution is the firm's global institutional electronic trading business. In addition to UBS PIN, Direct Execution offers Direct Market Access (DMA), a suite of advanced Algorithmic Trading strategies, an intuitive analytics platform via UBS Fusion, and execution management systems called UBS Sapphire and UBS Pinpoint.