Otkritie and SunGard release Russian algo trading tools
Russian broker Otkritie has chosen financial technology company SunGard to help launch a new direct market access service that should make it easier for investors to access Russia’s capital markets.
Russia is currently in the midst of reforms designed to turn Moscow into an international financial centre. Supported at the highest levels in the government, including by President Vladimir Putin, the reforms have already achieved the unification of the city’s former Micex and RTS exchanges into a united Moscow Exchange. They have also resulted in the creation of a central securities depository in November, and a shift from T+0 settlement towards T+2 settlement over the remainder of this year.
The new Otkritie/SunGard service provides real time currency conversion from the Russian ruble to the US dollar – a service that is useful for risk-averse investors that do not want to take on any currency risk. SunGard has also added access to an algorithmic trading service, which is designed to make it easier to trade Russian stocks – including those outside the top 20 names.
“Russia’s regulators have done a lot to provide a western experience,” said Philippe Carre, global head of connectivity at SunGard. “There’s a strong IPO pipeline on the way – the government has indicated it is going to float some large companies. Investors are looking to expand beyond the top 20 names such as Gazprom, into the Russian consumer companies – and they want to do it without necessarily adopting a high-touch approach. These algo tools help achieve that.”
While Russia currently lacks a large domestic pool of long-term institutional investors, there is strong retail activity; Carre suggests that demand for the algos is being driven by international investors together with medium-sized brokers, some of which are only now easing back into the Russian market following the trauma of the country’s default in 1998.