Checking in on APAC Equity Market Structure Part I

PETER HAYNES: Welcome to TD Cowen's podcast series Bid Out, a market structure perspective from North of 49. My name is Peter Haynes. And today, for episode 63, we will travel to the far east for the first of a two-part update on some of the trends in equity market structure within the APAC region. This follows our recent series on European market structure from a couple of months ago. And in the next couple of weeks, we'll cover off the US as we work our way around the globe.
Joining us are two APAC regional market experts. John Fildes is a 30-year capital markets veteran with exchange management experience on his resume, and he joins us from his current place of employment, Bain and Company's Sydney office. George Molina is Head of Global Trading for Templeton Global Investors, a Franklin Templeton specialized investment manager. Thank you both for making time to join us today.
OK, George, I'm going to start with you. I took a look at your CV on the Templeton website, and it indicated that when you started, you were legacy Templeton out of the Fort Lauderdale office, and you relocated to Asia in 2002. You currently own responsibility for global trading, but I promise you, I'm not going to make this discussion about Canada. But I am curious, in a general sense, how do you compare trading in North American markets or European markets with trading in the global markets that you cover in the APAC region?
GEORGE MOLINA: Hi, Peter. Thanks for the kind introduction. And yes, it's been over 20 years out here in Asia. I've seen it all, from the opening of the markets, opening of China, foreigners being allowed to invest across the region. It's been a fantastic ride, and we're seeing much more going on in this part of the world.
Going back to your initial question, in terms of the differences across trading in Americas, Europe, and Asia, there's a number of differences, and we can start off with just simply volumes. Volumes in China equity loan on average trade more than all other Asian markets combined. So to give you an example, in May, the average daily volume in China, if you combined Shenzhen and Shanghai Stock Exchange, was about $132 billion US a day.
The next closest market in Asia is Japan, at $32.8 billion. And then if you move on to closing volume, which seems to be a very big specific indicator these days in the US and Europe, closing volume accounts, in those regions, for about 30% of the daily volume, while in Asia, it's closer to 20% as there's less competition to the exchanges, which makes it a bit challenging for liquidity.
In Europe, fragmentation of liquidity is something that stands out to me. Asia and Europe trade across multiple market regulators. The US deals with one regulator, one set of rules. And then you can go on to implementation costs, stamp duty exchange fees, which can be quite costly outside of the US.
PETER HAYNES: Yeah. You mentioned closing auctions. We're going to spend some time digging in on some of the developments that are happening in the space in Asia on closing auctions in particular in just a moment. John, one of the main differences that's often pointed out, and George just mentioned it in his answer, was the lack of exchange competition that most of the Asian markets-- and Brazil we're going to talk about here today.
Given your experience as CEO at Chi-X, Australia some years back, the one competitor in the market to eke out some share of trading in one of those marketplaces, you are well-positioned to answer the question, why is there not more exchange competition in Asian markets, and for that matter, Brazil, and do you expect this to change?
JOHN FILDES: So thanks, Peter. It's a really fascinating question. I mean, when you look at the US, the reason you've got so much competition is because you've got DTCC and OCC. So because you've got a centralized utility clearing platform for cash equities and for options in the US, that makes it very easy for somebody to spin up a competitive trading platform and plug straight into the post-trade utility.
And similarly, in Europe, when Chi-X Europe launched, it did so in conjunction with EMCF as a clearing platform, which has now morphed, through M&A, into EuroCCP and is now owned by Cboe. But again, because you've got competitive post-trade in Europe, that's facilitated the ability to bring new trading platforms to market.
So one of the biggest obstacles in Asia has been the ability to develop a post-trade platform. It's post-trade that facilitates competition in trading. And even where competition has come along, generally speaking, it's been forced to use the legacy provider's post-trade. The exception is probably India. And in India, where the Bombay Stock Exchange, the BSE, is actually the oldest exchange in Asia.
But in fact, the NSE was encouraged to start up to provide competition to the BSE. But both have their own clearinghouses, and indeed, their own depositories as well, which is highly unusual, to have multi-market depositories. In the other markets in Asia, so where competition has developed, in Japan, in Australia, the competitors have been required to use the legacy clearing house, be that CHESS in Australia-- and we could spend hours talking about CHESS if you want-- but also the JSCC in Japan.
In other markets, it's been much more difficult to bring competition. For example, in Hong Kong, there's no competition, even though people would like to see it, simply because the Hong Kong exchanges monopoly is actually embedded by statute. So the securities and futures laws in Hong Kong prohibit competition.
The rest of the markets really lack that sort of critical mass to have brought competition. But the cost of building a clearing house to compete is normally way beyond the cost of developing a trading platform. And so that has been the biggest obstacle to competition.
You mentioned Brazil as well, and I will comment briefly on Brazil, because B3, what was BMNF, VSEPR, and CTP, has had an integrated vertical monopoly for a long, long time. But we are now actually starting to see glimmers of competition emerging in Brazil. And I think within a 12- to 18-month period, we'll probably see three competitors launch there.
So CSD, which is a competitor based largely around post-trade, but which is launching with the backing of Cboe's bids platform for block trading, and then ATG, which is now backed by Mubadala from Abu Dhabi, is likely to launch in the cash equity space.
And then A5X is launching a competitive derivatives platform in Brazil. Whilst ATG will probably use B3's clearing platform, the others will be launching with their own unique post-trade solutions. So we are seeing competition emerging now in Brazil, and that's exciting.
PETER HAYNES: There's a lot to dig in on that. So the first question I'm going to ask on a follow up, John, is, where there is competition-- and maybe there's not a general rule on this-- but for instance, let's talk about Brazil. Is there going to be-- how are regulators viewing best price obligations? Are we mostly a best ex mentality like Europe or are we at best price mentality like North America?
JOHN FILDES: The best execution in Japan has been the biggest inhibitor to competition in that the regulator in Japan has set the best ex rules to be largely whatever the broker says they are. And so the brokers have typically defined best execution as executing on the exchange of primary listing, which is typically the Tokyo Stock Exchange or Osaka and Nagoya, Fukuoka, Sendai, and so on. But it's been executing on the primary market.
So there's no best price or best cost of execution or anything, which has really inhibited the growth of the PTSs in Japan, being Japan Next and now Cboe Japan. Interestingly, Korea, where competition is going to emerge in the form of next trade, there, the regulator has been very clear on best execution, Although interestingly, they have split the definition between passive and aggressive orders.
So they've said that aggressive orders, best execution is about best price, which includes the cost of execution. But for passive orders, it's about the ability to get executed. And that may indeed dictate against next trade because it's how does next trade build up that passive order book?
And the fact that [? KRX ?] will be conducting the surveillance of next trade in Japan is not particularly helpful to the competitor because the surveillance rules in Korea heavily dictate against market-making, and in fact, almost make market-making, in the traditional sense, impossible. So lacking market makers and lacking natural passive order flow, how will next trade achieve passive order flow? That's a really big challenge there.
PETER HAYNES: Well, I was going to say, we'll dig in on next trade as we work our way through the different marketplaces over in Asia. And I want to go one by one, John, but start with the biggest one from a market cap perspective, and that's China. From afar, it seems that political tensions between the US and China have led to a cooling in interest in investing in China by Western world investors.
Again, it seems like every time the local market in China takes a step forward in openness, it takes a step back in some form of protectionism. Most recently, we saw a lot of headlines with respect to limitations on trading at the open and close for some quantitative investors in particular.
It appears there is currently zero appetite globally to increase China A-share onshore exposure in Chinese benchmarks. And there remains some talk, even, that some of the benchmark providers-- one that you used to work for, MSCI, I think-- should be standalone. Do you agree with the assessment of China's market oversight and openness and the lack of global interest currently? Do you agree with this assessment?
JOHN FILDES: That's a difficult one, and I will ask George to join in as well because he experiences this on a daily basis. I mean, it was a long and fraught process to actually bring China into global indices, because China, obviously, had very serious-- the QFII limit restrictions on investment in Chinese companies. Those were very gradually opened up. And then with Hong Kong Stock Connect, that increased the ability to access without a QFII allocation.
And it's interesting. When you look at stock connect, a lot of the flow is still predominantly southbound rather than northbound. And you're right that there is a geopolitical angle on this, where the politics of the situation are precluding investment in various sectors. So US has restricted investments in China tech, in AI, and so on. There's obviously been a chip war going on. So there's the geopolitical aspect to this. But nevertheless, China is still in the emerging markets. It achieved that status.
I don't see MSCI responding to political pressure, because there could have been many occasions when MSCI could have made politically driven decisions but have not. And indeed, Taiwan remains a part of the emerging market indices alongside China as well. So I don't see MSCI making any-- a knee-jerk decision to restrict investment in China. That is much more going to be driven by geopolitics. But as I say, I defer to George on this, who deals with China investment on a daily basis. George.
GEORGE MOLINA: Yeah. I think, John, I would just add that in China specifically, the challenge has also been the capital controls in place and some of the-- the RMB, the currency, is not a freely tradable instrument yet. And until that happens, I think we'll struggle to continue to increase the weighting within MSCI, is just my personal view.
With that said, China has made a lot of change and progress in allowing foreigners to invest, either be it by QFII, northbound investment, fixed income, and that continues to be quite popular. Recently, we have had more southbound investment, obviously. And as John rightfully pointed out, the geopolitical situation has made it a bit difficult, but it's also been the economy as a whole which I think has had a turn, where we're starting to see some bright spots.
And in May specifically, we saw a bit of a rebound coming back in as a lot of investors, specifically foreigners who've been out of the market, started coming back in. So I think there are some bright spots. There's still a lot to go through this year with elections. We have a big meeting in China this month for the party, and everyone is closely monitoring that.
PETER HAYNES: George, just for the benefit of us in North America that are tourists once in a while in China, when you refer to northbound versus southbound, can you just define exactly what you mean by that?
GEORGE MOLINA: Sure. Investors in Hong Kong who are allowed, or foreign investors allowed, to invest into China via the Hong Kong Connect program, and then vice versa, northbound mainland investors able to invest down in Hong Kong stocks via the southbound program.
PETER HAYNES: Got it. OK. Let's talk about a practical example, if we can, George, where you have one of your funds as a portfolio manager that-- a North American portfolio manager, let's say, that wants to own a Chinese stock. Can you walk through us how you go about trading? A simple example of buying, say, I don't know, $10 million worth of a Chinese stock for one of your US mutual funds, a stock that the US company is allowed to own?
Can you just walk through how that process would work? Are there 10 different brokers that you can go to trade that name? Is it easy to trade with one broker? Are there information leakage concerns you would have in trading within China? Are there global brokers you deal with, or only onshore local brokers? Can you just walk through how that would work, just a simple example?
GEORGE MOLINA: Sure, Pete. Not a problem. So I think we've got to be clear, there are two exchanges in China. We have the Shanghai and Chen exchanges. But we also have Hong Kong, where a lot of China-listed companies, you can trade and buy and sell on a daily basis.
For China mainland stocks, which we are buying-- so what they're called is A-shares-- the market is fully automated. We can go directly into the market via our brokers onshore-- or offshore brokers, who can go into local brokers and trade directly into the exchange, call it a direct market access of sorts.
High-touch trading, where you're picking up the phone and actually calling a broker in China, nobody does that. Everyone's pretty much going straight through their system. So very liquid market, I said earlier. Trades over $100 billion a day, very liquid. I think the one big change, if I compare it to the US, is that about 64% of the daily volume is retail, so you have some very tight spreads. And you can trade basically anything, most stocks.
There are some foreign ownership limits depending on sectors and companies, which [? closely ?] you have to monitor. But yeah, it's a very, very easy market to trade. And I think that is why, as you mentioned earlier to John, there are some restrictions being put on on some of this program trading, as they're calling it. But basically coined funds that maybe use some of those loopholes in order to create some liquidity.
PETER HAYNES: I was struck by the comment that George mentioned earlier about dollar value of trading in China compared to Japan. When you look at the Japanese market cap being almost 2 and 1/2 times what China's market cap is in the benchmarks, let's talk about some of the changes in Japan which perhaps will change those ratios a little bit.
For the past several years, the Japanese exchange umbrella organization has been working on modernizing the local market, and it finally reached some conclusions. In November of this year, trading in the local Japanese market will be extended by 30 minutes and will now end at 3:30 PM, and there will be a new closing auction that's launched in conjunction with a new trading engine known as Arrowhead. John, can you talk about exactly how this new Japan closing model will work?
JOHN FILDES: Thanks, Peter. It's strange that Japan hasn't really had a closing auction until now. As we've seen around the world, closing auction volumes have been building. And a large part of that has been the migration from active to passive investment. So as growth in passive investing, growth in ETF investing has grown, given that those products are benchmarked to the close, closing auction volume has grown globally.
And that is the sole arena for the primary listing exchange. So ATSs, competing exchanges, cannot compete for closing auction, because you can only have one closing price, and that's on the listing venue. So closing auctions have been a monopoly, and will continue to be, for the listing exchanges globally.
Japan has competition in the form of Japan Next and Cboe Japan, and they have been growing slightly in terms of market share. I think, collectively, they're about 15% now, SBI with 10% and Cboe with about 5%, but very much constrained, as I said before, by the lack of a clearly defined best execution mandate from the regulator in Japan.
Now, the original Arrowhead was launched in about 2010, and that is a trading platform built by Fujitsu. And the latest version of Arrowhead, the latest upgrade, is due out soon, which includes this closing auction.
So a couple of things. First of all, the TSC will be extending their trading hours by 30 minutes, although the PTSs already offer longer trading hours. So they'll be extending their trading hours from 3:00 to 3:30 in the afternoon. But then Zaraba Trading, which is the continuous trading, will finish at 15:25. And then the Itayose, which is the closing auction, will happen at 15:30.
Now, it's interesting that the PTSs will not be allowed to trade during those five minutes. So the competitor exchanges actually have to stop trading during those five minutes when you go into the closing auction. But they can then restart, and will continue to trade, possibly at the closing price, after the Tokyo Stock Exchange closes.
I think the interesting thing here is this whole idea of trading hours, because I do think that globally, the growth in retail trading is really calling into question the traditional trading hours of exchanges. And we're seeing big debate now in the US about moving to 24-hour trading. Obviously, crypto has accustomed a lot of retail traders to being able to trade 24/7. And we're seeing the extension of trading hours by the PTSs in Japan, and shortly to be the case with Nextrade in Korea also offering longer trading hours.
PETER HAYNES: I'm taken by the fact that the other marketplaces will not be able to trade during the five-minute auction. I like that rule. It doesn't exist here in Canada as we've gone through a massive change to our market on close mechanism.
But I'm curious, during that five-minute window from 3:25 to 3:30-- and I'm not sure if you guys know the answer-- will there be constant updates on imbalances, demand for liquidity on the close, the way there is on NASDAQ and the NYSE, who put out updates every 10 seconds during that end-of-day auction, or will there be really no transparency that's taking place during that five-minute window and we'll just be entering blind orders into the auction, looking for a clearing price at the close?
JOHN FILDES: So, Peter-- and George may know something different, but I've not seen anything about what's going to be published. I've seen a lot about surveillance of trading during that time. So the JPX has published a long document saying about the enhanced surveillance that will be going on, i.e., there will be a very close focus on whether participants change an order or change the price on an order during that time. But I've not seen anything about visibility of the data. I don't know, George, if you've seen anything on that.
GEORGE MOLINA: No. I think the biggest thing is that the order book information will be-- five minutes before, will be disseminated during the acceptance time as order [? settings ?] are before opening. So there is some number of changes still going on. This is November 5 that this will be put in place. I've not heard much more on that.
PETER HAYNES: Well, I know that the local people that are making markets and managing liquidity on the close will have this all figured out. There'll be a lot of transparency for people in that market as we lead up to that very important development later this year. And we're going to debate here the 24 hours versus regular trading hours.
Before we get to that debate, though, John, I want to actually go the other direction. This might be a question for George as well. Lunch break. I am a huge fan of the market halting, or closing-- primary market closing-- during lunch. We all know what the VWAP curve looks like during that two-hour window between noon and 2 o'clock in North America, or 11:30 to 1:30.
It's a period of time where it's just costly to trade. If we could concentrate liquidity at a closing auction in the morning and an opening auction just to start the afternoon, I think it would be better off. I'm just curious, what is the view on the lunch break in Japan? And maybe I'll ask you that question, John. And if you have any thoughts, George, chime in.
JOHN FILDES; I remember when they tried to get rid of the lunch hour in Hong Kong. The most vociferous opponents were all of the restaurants around Exchange Square.
PETER HAYNES: Yeah. I mean, that's the joke. I care about-- I mean, I get that. That makes total sense. And the gyms, and people can't go work out. But I just think it's a natural to take that window of trading out of the regular trading day, but I know it's impractical. But I am curious if there is any talk about eliminating it in Japan now.
JOHN FILDES: Certainly not that I've heard of. I mean, again, the PTSs don't have a lunch break. You can trade on the PTSs during the TSE's lunch break. But there's been no debate about getting rid of the lunch hour on the Tokyo Stock Exchange that I'm aware of.
GEORGE MOLINA: Absolutely not. I don't think we've heard that in quite some time. The lunch hour used to be much longer. So they have shortened it already. And I think if I look at it from a global market perspective in 24 hours, as you mentioned earlier, it's more about making sure we do some of the volatility across all the different other markets across the region that are opening.
As China is opening up and get going on their day, Japan is still open. There's some arbitrage trading going on across the region, some hedging going on. So just making sure that we intertwined with each market and its rates for a better outcome.
PETER HAYNES: So when you think of a trade using a VWAP benchmark in Japan, what happens over that lunch break, or do you guys consider-- are orders being executed that are schedule-based trades over that day, or is the schedule-based algo-type trading taking place only during the primary markets hours and not during that halt at lunch?
GEORGE MOLINA: It's primarily during the market hours. During that whole lunch, a lot of investors will be looking at the rest of the markets, but also preparing for how the markets are looking to open in Japan and just positioning themselves accordingly.
What you find at lunchtime, specifically for the domestics, a lot of baskets are being created. A lot of the flow for the domestic institutional investor, for the big pension funds, are done in the afternoon. So at lunch time, we see a lot of repositioning and rebalancing going on.
PETER HAYNES: Well, that's interesting. John, being an old index guy, you might know that one thing that happens if you have a lunch break is you actually can change how benchmarks adjust. You could actually move to a two-tiered system within the same day, where half the weighting change takes place at lunch.
You could set the divisor at lunch, and then the second half could be done at the end of the day to dampen the impact of the actual liquidity event. But that would only happen in a marketplace, where you actually had that period of time where the primary market was shut down. But we're not going there. That's too hypothetical.
I'm going to move, George, over to India, which is a market that John mentioned earlier has two exchanges, Bombay and National, or [? NSC. ?] And interestingly, most significant stocks, I believe, are listed on both of those markets. It does feel, to me, like China's loss that we talked about earlier in terms of flows from the international community seems to be India's gain, with India's market cap actually recently surpassing that of Hong Kong's.
So my first question on India comes back to the close. And that is the case that-- and I hear this from the index community-- that they use of VWAP calculation from 3:00 to 3:30, which is obviously not ideal for people that are trying to replicate the closing benchmark.
I'm curious, from your perspective, do you get to see those closing buy and sell orders from indexers that are VWAP from 3:00 to 3:30 where brokers will come to you and say, look, a client needs to buy a million shares of this stock, VWAP, from 3:00, and you have a chance to take the other side of that, or is that difficult flow to interact with? And then from there, is there local talk about going to a more traditional auction close like Japan's moving to or we have in North America?
GEORGE MOLINA: Yes, absolutely. So we do get to see that VWAP flow in the last 30 minutes from brokers, natural flow specifically, which we can match off with. So you do get that flow, specifically from domestic brokers, which have gained a huge market share as of late. They've been the bigger players in India in the last 12 to 18 months. In terms of closing auction, it's much needed.
We've been making requests via ASIFMA, via Asia Trader Forum, via FIX membership, all to consider taking some of the feedback, and they have been very susceptible to it. We've given them some models on what we think works and what do we think would work best, specifically as passive funds continue to increase in terms of participation into that market from the key stakeholders.
No decision has been made yet. I hear that we're very close to one, so we might actually get a surprise by year end and see a closing auction come into place. Closing auctions, as we all know, provide greater access to liquidity.
Using a closing auction mechanism will protect the interest of all investors, retail and institutional, where the mechanism would allow for us to manage higher volumes and effectively reduce that volatility that we're currently having in India. So yeah, we're very much in favor of having a closing auction, and we continue to participate, with our industry peers, to work with the regulator and exchange on how this can be done.
PETER HAYNES: OK. So technical question. If most of the largest Indian stocks are listed on both exchanges, what's the primary exchange for those companies and where would their benchmark be? Is one of the Adani companies primarily-- they're listed on both, but they call their primary listing Bombay or the other way around? How does that work?
GEORGE MOLINA: Unfortunately, we don't have to do it by volume, by liquidity. And at the moment, NSE still captures over 90% of liquidity of most of the big blue chips or most of the stocks traded in India. So you're going to have the price being skewed towards the NSE.
With that said, as John mentioned earlier, we do have two settlement systems in India, which will be merged, John, late this year. I believe it's coming up in the summer. And we'll be able, now, to book one ticket out regardless of where you trade. So now, smart order routers, which are executing across both markets, can be done with one ticket.
PETER HAYNES: OK. So that actually leads to-- when talking about settlement, leads to some of the more technical questions that I hear anecdotally about the Indian market. And this is a term-- I think it's misused all the time. People say Canada is an ID market. We're not an ID market. We have broker IDs. So people know that broker 7 is TD or broker 9 is BMO or broker 2 is RBC. But when you hear them refer to India as an ID market, I always hear that it is a very difficult market to manage information in.
And I understand-- I want to make sure this is accurate, George-- that when you buy a stock in India, you're required to unwind that position with the same broker, which provides you very limited flexibility in managing your information around that particular name. Do I have it that that is a rule? And number two, what exactly does it mean when people say it's an ID market?
GEORGE MOLINA: So in India, you do need to have a foreign ID in order to participate in executing domestic exchanges. So that is needed. And opening up documents process can be quite lengthy depending on the type of investor. So there is an ID for your company, and you're able to trade into The Exchange with that.
In terms of executing with the same broker, I've not heard anything about that. We can buy and sell a stock with any broker, regardless of who we bought it with or sold it with. Even in swaps, which have become very popular-- one of the biggest swap markets in the world, if not the biggest these days-- brokers allow for clients to step out.
So that has not been my experience. It's a pretty easy market to go into once you have your ID. Concerns about the regulator-- regulator in India has put some very robust surveillance and risk systems in place to allow for the foreign investors to freely trade there.
PETER HAYNES: Has the swap market grown because this is an avoidance of stamp taxes? Is that the reason why that is not the case in India?
GEORGE MOLINA: Yeah, believe it or not, it's been retail. It's been massive retail demand for the swap products, single-stock futures, which have been on a huge increase as retail investors-- and when I say retail investors, there was some report out by a local broker, these are the young investors. We're talking about 18-year-olds to mid-twenties who have been spending in the marketplace, and very active specifically in this tool, to invest into India.
JOHN FILDES: I think, actually, there's an interesting parallel here, Peter, between the US and India, because what we've seen is this huge growth in options trading in the US, particularly 0DTE, and we're seeing similar trading patterns emerging amongst a younger demographic in India around options and single-stock futures. And it's almost the gamification of trading in both of these markets. Very similar to almost sports betting going on.
PETER HAYNES: I totally agree that there's a convergence, and it's app-driven. It's the Robin Hoods of the world that are going to allow people to trade crypto and stocks on the same app. And I'm sure it won't be long before there's sports betting on that exact same app. We're definitely in a convergence of gamification, as you referred to earlier.
As we think a little bit more about the Indian market, I guess you're shooting down my thesis here, and I'm glad to hear it, George, that the Indian market is-- and again, in the words of a few people in North America-- the leakiest market that they trade. It sounds to me like your local experience would not be the case. And if that's the case, are there any tips and pieces of advice you have for investors to manage information leakage within India?
GEORGE MOLINA: Yeah. Unfortunately, they're still looked upon as a leaky market, but things have definitely improved a lot from when I first arrived in Asia in the early [? 2000. ?] So there's a lot more being done by the regulator. I think what we try to do, on our side, is we try to keep the orders very limited to a few specific brokers, and we try not to spread that order around to many brokers.
I think the fact that they allow now for electronic trading for us to be able to go into the market via direct market access or use some algorithms has also helped. But at the end of the day, when we're looking for large liquidity for institutional investors like ourselves and many of our peers, we need to go find that natural liquidity, and we will need to open up to some brokers.
There is market share data which is made available. So we know the brokers that are active across the exchange that we can go to for specific stocks. So for us, it's just making sure we have people on the ground. We have a trading desk in India, which makes it very, very helpful for us to be on the ground and be able to speak to multiple brokers across the whole country. Using a combination of both foreign and domestic brokers in order to find that best execution.
PETER HAYNES: I'm glad to hear that's an improvement. Again, the more engagement that we have amongst the community with regulators, the better. And John, I'll ask that question actually.
Before I came on today, I was speaking to a global investor who felt like-- or wanted to understand, or wanted me to ask you folks if you feel like the institutional community is as properly engaged in trying to make markets better across the region than they would be, say, in the United States, where there's an incredible amount of work being done by the investors and by their brokers to try to make the markets better.
And the same can be said about Europe. And the feeling amongst this particular person was, maybe that's not the case, or it doesn't feel to be the case, in Asia. Can you answer that? Can you shed some light on that thought?
JOHN FILDES: Look, I think George actually referred to the three organizations that are critical here in Asia, which are Asia Trader Forum, ASIFMA, and FIX. And all three of those organizations do actively engage with the exchanges and the regulators around the region to make markets better, to make markets more efficient. I would just encourage any global investor to be involved there. But the opportunity to be involved definitely exists.
PETER HAYNES: OK, John. We will stop there and pick up with discussions on some of the other local markets when we chat again in part two of this series next week. John and George, thanks so much for the one on one on all things equity market structure in APAC.

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