Please outline the three most important macro trends that you believe will impact the market infrastructure industry in 2019.
Looking ahead, at the macro level, these trends will likely have the most impact on the market infrastructure industry in 2019:
- The rise of unilateralism and the challenge it poses on win-win development and globalisation will increase the uncertainty and complexity of global economy and trade, as well as the financial markets. For exchanges and clearing houses alike, it is imperative to fully support the markets with their risk management needs on one hand, and implement higher standards of internal risk control on the other hand.
-The ongoing efforts to align and unify global financial market standards and regulations will call for the market infrastructure industry to strengthen cooperation in product design, trading, clearing and settlement, market access, cross-border regulation and improving transparency.
- The rapid evolution in FinTech will continue to bring new opportunities to the market infrastructure industry, requiring us to fully recognise and tap into their potential to promote decentralisation, facilitate market access and provide real-time secure trading.
The WFE’s Sustainability Principles (launched in October 2018) and annual ESG survey show us that more and more exchanges and CCPs are taking a leadership role in promoting the sustainable finance agenda. How is your business taking a more sustainable approach to the financial system?
As a financial derivatives exchange, CFFEX plays a leading role in promoting the sustainable development of financial markets though continuously building a standardised, transparent and open marketplace.
Firstly, we have listed three stock index futures and three Treasury bond futures and made great efforts to enhance our trading mechanisms to meet diverse risk management needs.
Secondly, we maintain close communication with market participants, and continue to expand our product offerings to support the sustainable development of the financial system.
Thirdly, by implementing international standards such as PFMIs we consistently work to bring our rules and regulations in line with industry best practices, thereby improving the robustness of the market ecosystem and serving both the capital market and the real economy.
Fourthly, we prioritise investor education and carry out extensive education programs on sustainable investment to help improve public awareness, develop financial literacy and build professional expertise.
In your view, what’s the technology most likely to disrupt global capital markets in the next 12 months?
With the development of performance boosters such as GPUs, AI technology including machine learning and deep learning can now be widely applied in market supervision, behavior analysis, customer profiling, intelligent operation and maintenance, etc., thus significantly improve surveillance capacity and decision-making efficiency for exchanges and regulators. At the same time, Robo-Advisors and AI trading models is improving trade execution efficiency at the user end and playing an increasingly important role in global capital markets. We believe in the next 12 months, big data, block chain, AI and cloud computing will all impact the global capital markets, but what is most worth looking forward to is big data combined with AI, which will inevitably enhance the exchanges’ capacity to service and manage the markets.
Shanghai Financial Futures Information Technology Co. Ltd., a wholly owned subsidiary of CFFEX provides leading technical solutions to the Chinese financial derivatives market. It offers a comprehensive suite of IT services, including market surveillance solutions, flexible market data solutions, multi-asset settlement platforms supporting complex account structures, cross-counter capital transfer and clearing services for brokers, and high performance real-time risk control support. In addition to providing the industry with cutting edge solutions, we stay on the forefront of financial technology development, especially artificial intelligence, where we have established a machine learning based intelligent analysis platform, capable of delivering preliminary analysis of market conditions and public opinion data.
What are the key strategic initiatives you’re working on at the moment?
CFFEX is committed to building a dynamic and resilient financial derivatives market that serves the development of the real economy. Our key initiatives include:
- Diversifying the product line, including preparing for the launch of more stock index futures and options, 30 year Treasury bond futures and 10 year, 5 year and 2 year Treasury bond options and completing the product design of 3 month Treasury bond futures.
- Facilitating market access for foreign investors in line with the cash equity and bond markets, including increasing foreign participation in stock index futures and acquiring approval for QFIIs and RQFIIs to participate in Treasury bond futures.
- Improving market quality through introducing Exchange for Physicals and Market Marker schemes, and promoting market access for banks and insurance companies to improve investor structure.
- Upgrading the IT system and data centres, launching our New Generation Trading System and continuing to provide the market with secure, robust， efficient and user-friendly IT support and services.