“The introduction of DMA provides accredited DMA NZX Firms the ability to tailor their services to suit existing clients and to reach a much broader range of new clients, both domestic and international.” said Carl Daucher, NZX Strategy. “Accredited DMA NZX Firms will individually determine the right level of access to the New Zealand market for each of their clients, whether they are based in Auckland, Sydney, Hong Kong or New York.”
“A review of global markets indicates that a significant level of liquidity is driven by investors and traders who use DMA. In addition, DMA will serve investors who use sophisticated trading strategies that require instant or automated order execution. This is especially important for trading in futures and options contracts which we're introducing later in the year,” said Daucher.
“NZX has made a significant technology and regulatory investment in order to introduce DMA. The result will be a more liquid market with a greater capacity to meet the needs of the entire spectrum of potential investors. ”
DMA will be rolled out in two phases. The first phase, Direct Principal Order Processing (DPOP), will commence on 4 August 2004, and will allow accredited DMA NZX Firms to nominate clients, such as fund managers, to enter orders directly into their system to be submitted to the market. Clients will be able to view orders in the system and and give order instructions with more control.
Two NZX Firms are already accredited to go live with DPOP on 4 August – CitiGroup Global Markets (NZ) Limited and ABN AMRO New Zealand Ltd. It is expected that another three will be accredited by the time DMA goes live.
Phase two, Direct Client Order Processing (DCOP), will be rolled out in consultation with accredited DMA NZX Firms. DCOP allows accredited firms to provide clients with the ability to enter their orders directly into the market without having their NZX Advisor submit the orders on their behalf. This activity will be tightly controlled by accredited firms through the use of electronic filters which will apply to each order submitted to the market.
DMA will initially be available through IRESS Market Technology, an independent software vendor, which has developed an application to meet the requirements of DMA trading activity.
For more information on DMA, email Adrienne Quinn: Adrienne.quinn@nzx.com.
