“In Indonesia, we don’t see value
in joining the Link. There are a lot of
things that need to be done,” he adds.
The failure of the ATL might also
be due to the fact that it is simply
not needed. What ASEAN set
out to do could already be done.
Systems have long existed that
allow for trading within the region
and these systems are considered
e;ective and not in need of replacement. They are also comprehensive. Large brokers can access
the seven major ASEAN exchanges,
so why would they bolt onto a
platform that only allows them to
“The idea is good and the tech-
nology is there, but it is an optional
channel to the inter-broker model
that is already established, running
and working,” says Deutsche’s
Chan. “There are now two roads
from point A to point B. A new
road has been created. However,
this new road requires market
participants to change some of the
systems within their organisations.
It became of matter of cost-benefit
(HNX), the Indonesia Stock
Exchange (IDX) and the Philip-
pine Stock Exchange (PSE). It was
estimated that when completed,
the ATL would allow for access to
3,600 regional shares. But as of ear-
ly 2017, no real progress had been
made since the joining of the SET.
The reasons for the weak rollout
of the ATL are many. For some
markets, regulation has stood in the
way of connecting to the network.
In the Philippines, for example, the
SEC requires any equity trading in
the country to be locally registered.
This has prevented the ATL from
being established there despite
significant support from the private
sector (especially the PSE).
Concern on the part of brokers
has also led to slower than hoped
for adoption. Intermediaries in
some of the markets are struggling
to survive and would probably
not hold up against international
competition. Participants have also
noted the need to pay commissions
to two brokers – the home broker
and the broker in the other market
– as an impediment.
Indonesia has been particularly
cool on the ASEAN Trading Link.
O;cials have cited di;ering levels
of market development around the
region and have also mentioned
certain technical issues that argue
against it implementing the connection. For example, the participating exchanges have not established a dispute resolution system,
and Indonesia would like to see
that in place before it joins. The
lack of an Indonesia connection is
a big blow considering the size of
the country and its importance in
ASEAN. Without Indonesia, others
are not likely to sign on.
Is there a need?
“It is actually a good concept, but
when it is put into practice, it is not
working,” says Aswin Adhinugrahanto, head of the product development unit at the IDX and lead
on regional integration at the exchange. “One of the reasons is lack
of demand. We know products from
the US and Europe, but we don’t
know products from Thailand.”
“The idea is good and the technology is there,
but it is an optional channel to the inter-broker model that
is already established, running and working.”
BOON-HIONG CHAN, APAC HEAD OF MARKET ADVOCACY FOR
GLOBAL TRANSACTION BANKING, DEUTSCHE BANK
36 The Trade Asia Spring 2017
[TRADING VENUES | ASEAN TRADING LINK]